6 Useful Tips to Help You Manage Multiple Credit Cards
Owning multiple credit cards is an excellent way of dispersing your payments to specific cards that offer promotions on a particular spending category. Applying for one card is difficult enough, but having a lot on-hand means that you have a history of good credit and have a substantial amount to use every month.
If you own multiple cards, then you’re likely a fan of its payment system, which involves accumulating credit debt for every transaction and settling the payments at a later date. They offer plenty of advantages from reward points to your eligibility to access exclusive promotions and other enticing perks. Although there’s nothing wrong with owning multiple cards, problems can arise when you aren’t responsible enough to pay dues on time and let interest charges pile up.
It can be a challenge to stay organized when you’re accountable for a lot of credit cards. So to help you out, we’ve rounded up the dos and don’ts of handling multiple credit cards, plus some tips on maximizing the benefits of each.
Open and maintain each card for a reason
There isn’t a single card that does best at serving all your needs. You can have a go-to card that works great on every spending category, but if you want to maximize benefits, it’s a good idea to have credit cards for a particular niche. One card can be great for earning reward points, while another may be the better choice to avail of petrol discounts. If your five credit cards serve different purposes that are all useful to you, then there’s no reason to close any of them. Use the right card for your favorite purchase categories to maximize the benefits of each.
For instance, the Mercury Drug Citi Card is perfect for purchasing health, beauty, and wellness products. If you use your card on partner spas, gyms, salons, and clinics, you’ll earn 3x bonus points. Additionally, once a year, every Mercury Drug Citi cardholder can enjoy an ambulance service worth P10,000 within Metro Manila.
Are you planning to apply for a Citi Mercury Drug?
Pay your bill on time
Having a lot of credit cards means having to keep track of and pay multiple bills every month. If you own three or more cards, then it’s easy for you to forget about paying for all of them. As a result, it’s pertinent that you keep a detailed tracking system to use as a monthly payment reference so that you’re on track with your recurring payments.
When determining how to prioritize balances, note that it’s best to pay the card with the highest interest rate or pay the card with the lowest balance. This method will help you avoid high-interest multipliers from piling up while clearing out your credit debt on as many cards as possible. Ideally, you should pay the balances in full. If you can’t, then at the very least, ensure that you never miss a payment. Trust us; it will hurt your credit score, as well as your reputation as a customer. You don’t want to lose your credit card benefits, do you?
Keep all those cards active
Credit card issuers such as banks review your credit card activity. If yours has been dormant for a certain amount of time, then they have all the reason to close your account or reduce your available credit limit. Closed accounts affect your credit score and history, so it’s crucial to only avail of credit cards that will be useful to you. Otherwise, they may end up doing more bad than good.
A wise credit card user knows how to use his cards alternately ensuring that each is utilized each month. This also allows for the minimum credit utilization rate which is good for your profile. Make sure you don't spend more than 30% of your credit limit.
Don’t use your cards all at once.
Banks partner up with various retail and service establishments for a good reason: to help you earn reward points and entice you to spend on goods and services on promotion. It’s a common habit to take advantage of this perk by directing all your purchases to particular malls or shops where your credit card can earn you the most rewards. You may have even spent on things that aren’t on your to-buy list, but were on such a good deal that you couldn’t resist. But carrying around all your cards and swiping them all without a plan can be dangerous.
You may have heard of the movie Confessions of a Shopaholic, where its protagonist, Rebecca Bloomwood, would haphazardly use multiple credit cards to pay for a single purchase. With the freedom credit cards offer, it can be tempting to do the same. However, it’s essential to fight the urge to do so, as it’ll make it easier for you to run into unnecessary debt. Evaluate the cards that you own, study their benefits, and determine which one is best for a particular spending category. When shopping, only take the cards you genuinely need to avoid overusing them.
Do check your credit card activity frequently.
In a viral Facebook post, a woman was charged about Php200,000 in a day for online purchases made with her credit card. A fraud had completed transactions without her authority or consent. Monitoring your credit card activity regularly and continuously updating your security measures will help prevent situations like this from happening, and will ensure that your account is still intact.
It isn’t difficult to stay updated with your credit card activity, thanks to the prevalence of digital platforms such as email and SMS, which you can use to keep in touch with your bank and credit accounts. Additionally, when you apply for a credit card, you now have the option to receive alerts via email or SMS every time your card makes a transaction, so it’s pertinent that you turn these on to aware of all your credit activity. Besides informing you of any purchases made with your card, they also allow you to check for anything suspicious going on with your card. Hackers know how to steal your credit card details and use them for fraudulent activity, so it’s crucial to be vigilant about tracking every transaction. Keep a list of your purchases so that you can cross-check them upon receiving your billing statement.
Don't apply for more than what you can manage
Using for multiple credit cards at once can do more harm than good. Credit bureaus view multiple applications as a dire need for credit and will tag each application as high risk, so it can negatively affect your chances of succeeding. Settle for what you have at present and make it work for your needs, as having too many cards that you’re unable to manage isn’t ideal for building a healthy relationship with credit cards. Additionally, it’s always essential to pay your bills on time because it will eventually improve your credit score. Ultimately, with a good credit profile, credit card issuers will notice you and will even offer you cards without the need for a strenuous application process.
Despite the challenge, managing multiple credit cards can help boost your credit score, making it easier for you to apply for loans on the occasion that you have to. The key is to remain responsible and stay on the right track throughout your credit journey.
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