10 Unknown Ways to Manage Multiple Credit Cards
Holding multiple credit cards comes with its own set of advantages and drawbacks. While that may serve countless purposes, borrowers who are incapable to keep a constant check on their cards are sure to fall into a debt trap. So, it’s imperative to manage these cards properly. Here are 10 Unknown ways to manage multiple credit cards
1. Justify having multiple cards
You get more value from every single card you own if each of them serves a specific purpose. This way you can reap more benefits from separate cards as opposed to having two cards with the same purpose.
Many Bank Credit Cards provide myriad exclusive benefits. Reward schemes, easy EMI options, free movie tickets, discounts on dining, frequent flyer miles, Reward Points, and discounts are just some of the features you get with many Bank Credit Cards.
2. Keep the utilization rate low
Holding multiple cards is okay, until and unless the borrower maintains a fair utilization ratio. Shetty advises borrowers to not use more than 30-40 percent of the credit limit at a time.
A borrower could have 5 different cards but if the utilization is going to be 20-30 percent, they are good. If it’s going to be 80 percent to 90 percent, it reflects he/she is very credit-hungry. So, it all depends on, not the number but actually how much utilization one has.
3. Check the terms and conditions on your credit card
The terms and conditions for a credit card must be checked thoroughly. The terms and conditions on a credit card point out the fees and rate of interest you will be paying as a cardholder. The terms and conditions of your credit card are available online as well as will be given to you in the document.
It will contain information such as the annual percentage of your credit card which will be used for purchases, cash advances as well as balance transfers. The document will also contain the minimum interest charge if the balance is carried through months.
The annual fee, the balance transfer fee, foreign transaction fee, the cash advance fee, late payment, and returned payment fee are also mentioned in the terms and conditions.
Most credit cards come with a reward and offer program which is also subjected to various terms and conditions. It is advised to know the conditions for these rewards and the rules surrounding them. From the minimum purchase amount to the list of partner restaurants, flights, and hotels, to the signing bonuses as well as any promotional offers.
4. Pay more than the minimum
However you split your payoff funds as you’re demolishing multiple balances, it’s smart to pay more than the minimum to every creditor every month.
Scoring formulas (and your card issuers) view those minimum payments as a sign of financial stress. Remember: Your goal is a string of $0 balances – and good credit.
In addition, paying more than the minimum may potentially save you hundreds, if not thousands, of dollars in interest. Plus, you could pay off your card balances sooner.
How much time and money could you save? Use CreditCards.com’s payoff calculator to find out.
5. Skip playing cards with annual charges
Having playing cards with annual charges makes issues troublesome for you in the long term. Paying an annual price yearly means that you’re truly paying greater than you’d pay if you happen to use the money for all of your purchases.
These playing cards are referred to as free-for-life bank cards. When you discover an excellent bank card for your self nevertheless it has an annual price, think about asking your bank card firm to waive the price for you. It by no means hurts to ask, does it?
6. Pick the right card for your purchases
Perhaps the most challenging part of having multiple cards is maximizing the reward points for yourself. It is important to pay attention to each card’s features which might include fraud protection, extended warranty for travel insurance. These features come in handy when you are making a major purchase with your credit card
7. Check your credit score
If your cards carry a large amount of debt, that can compound and have a negative impact on your credit score. So keep track of your credit history and score to ensure whether your spending habits are sustainable in the long run.
HDFC Bank Credit Cards let you transfer the unpaid balance from one card to another, so if you are falling behind on your bills on one card, you can transfer your balance from your other card.
8. Determine how much you can spend on each card
Credit cards can be useful, but they can also make it easier to spend money you don’t have. Developing a budget can help you figure out how much money you can charge on each card without running up a balance you can’t pay off. Once you start carrying a balance from month to month, you’ll likely have to start paying interest on it.
9. Frequent check on credit card activity
Owning multiple credit cards means multiple transactions of different values. While having two or more credit cards, it might get difficult to keep a track of all your purchases made. However, it is strongly advised to do so and keep a frequent check on the activity on your credit cards.
Many times, credit cards can be owned by a person but used by family members. Constant purchases on credit cards might result in substantial debt without you knowing about it or not keeping a track of it. There can also be the case of fraudulent transactions made. Due to this, if you keep a check on your credit card purchases through the card statement or even online, it will help you plan your finances accordingly to pay the bill amount at the end of the month.
10. Check Offers and Freebies
If you are having multiple credit cards then you need to check the latest offers and discounts available on usage of your cards. The various banks offer different types of discounts, cash-backs, or free coupons on their cards.
Most of them also offer a 0% EMI facility on cards to their customers. You need to find out which of your card is offering the maximum benefits and privileges and then start using that card often.
Conclusion: Using multiple credit cards can be an effective way to rack up rewards points and earn free travel, cash back, and other perks. Managing multiple credit cards may seem like a daunting task, but it doesn’t have to be if you’re careful about how you use them.
Setting up a budget, understanding your cards’ terms and limits, and finding a payment strategy that works for you can help you get the most out of your cards.