How many credit cards should you kept?: The use of credit cards has reached the level before Corona. According to RBI data, there were 8.03 crore cards in circulation in the country in July 2023. This number is 26.5% higher than in July last year. Many people have more than one credit card. The question is, how many credit cards should you have?
Credit scoring expert Parijat Garg said, “It is generally beneficial to have more than one credit card. The reason for this is that when one credit card does not work, another credit card comes in handy. But, handling and fixing multiple cards. It can be difficult to make their payments on time.”
Having more than one credit card also increases your chances of spending and falling into a debt trap. Aparna Ramachandra, Founder Director, RectifyCredit.com, said, “With high limit credit, users start spending without thinking much. The tax continues to carry forward the balance in the monthly statement. Thus, he spends a lot of money on interest.
You should have a credit card that matches your spending pattern. For example, if you do more online shopping then a shopping card will be right for you. With this, you will get many benefits like offers, cashback and discounts during shopping. If you use your vehicle to go to office, then it would be better for you to have a co-branded fuel card.
There are many facilities available in Mastercard, Rupay, Visa, Diners Club credit cards. You can also avail cashback and reward points on these cards. If you are taking a credit card for the first time, then you should prefer Visa or MasterCard. This is because the use of AMEX or Diners Club at some retailers and e-commerce websites can cause problems.
The advantage of multiple credit cards is that you have a higher credit limit. For example, suppose you get a maximum credit limit of Rs 2 lakh on a credit card of a bank. If you have two credit cards, your credit limit can go up to Rs 4 lakh.
However, it is important to keep in mind that having more than one card reduces your credit utilization ratio for each card. Kunal Shah, Founder, CRED said, “Remember that your credit utilization ratio should not exceed 30 per cent of the available credit limit. Crossing this limit can affect your credit score.”
