There’s no limit to how many credit cards you can have – the main thing is not to build up debt you can’t afford.
For some people, one credit card can be too much temptation. For others, having multiple cards allows them to manage their money more effectively – taking advantage of reward points or interest-free periods. Here are some factors to consider as you decide whether to get another credit card. |
If you’ve never borrowed money before, it can be tricky for lenders to predict how reliable you’ll be at paying it back. Using a credit card and making regular monthly repayments can help to build your credit score by proving your reliability.
Each credit card has its own credit limit, which means you’ll have money available should you need it. This could give you that added layer of confidence that if something costly happens, you’ll be able to handle it.
However, it’s a good idea to build an emergency fund to give you added security, rather than relying on credit cards as a first option.
Having multiple cards for different purposes – when used wisely – can help you earn rewards points or take advantage of an interest-free period. For example, you might use one card for regular spending that you’ll repay each month, and another for a big one-off payment that you’ll pay back gradually over time.
Explore: Types of credit cards
The more funds you have available, the more temptation you have. Keep your credit limit in mind before applying for a new credit card.
Everything you spend on a credit card has to be paid back – with interest if you don’t pay off the full balance on time each month – so it’s important to manage your spending habits.
If you borrow money on multiple credit cards, you’ll have to make multiple monthly repayments. This isn’t necessarily a bad thing, but it could increase your chances of forgetting one.
Setting up a bill pay to automate your payments can make sure your bills are paid on time.
Before taking out a new credit card, think about your current situation. Does the idea of making repayments sound overwhelming and time consuming? If so, it may not be a good idea to add another repayment.
Or are you comfortable with the way you manage your money? If that’s the case, adding a credit card might not have that much of an impact.
Explore: How to pay your credit card bill
When deciding whether to accept your credit card or loan application, a lender may look at how much credit is already available to you.
If you have multiple credit cards, they may look at the combined credit limits rather than just the money you’ve borrowed.
If you have multiple unused credit cards, this may raise some questions and potentially impact your credit score.
While it’s good to show lenders you can successfully handle multiple credit accounts, applying for too many can raise red flags.
The credit provider you’re applying to will run a hard credit check on your credit report to gauge your reliability when it comes to borrowing and repaying money.
Applying for too many credit cards gives a signal that you’re struggling financially – which may lower your perceived reliability and, consequently, your credit score.
This can affect your chances of being approved for more credit in future.
The answer depends on your circumstances and your money habits.
Here are some good questions to ask yourself:
If you have multiple cards, a balance transfer can help you simplify your repayments and potentially save on interest.
A balance transfer credit card allows you to transfer multiple balances onto one credit card – giving you a single monthly repayment and a period where you may not be charged any interest. This can help to give you some breathing space as you manage your debt.
