Two Cards Can Be Better Than One
With the amazing array of credit card options available today, it is often difficult to choose which card to apply for. The good news is that you may not need to choose between the benefits that you want. With some careful planning and controlled shopping habits, you can reap the rewards of more than one card at a time.
Balancing Credit Cards
If you plan to have more than one credit card, the key is to know when to use each one. If you are simply going to use the one that you happen to have with you or use most often, then you will miss out on the potential benefits of carrying more than one card. The biggest challenge is to make sure that you remember to pay all cards on time each month and, if possible, avoid carrying a balance on any of them. You will also want to choose cards with no annual fee to reap the rewards of using more than one credit card.
The Best APR
The annual percentage rate is important if you plan to carry a balance on your credit card. If you do plan to carry or transfer a balance, it is important to apply for one card that offers a low interest rate. Be sure to find out if the interest rate they offer is temporary or permanent to ensure that you are actually getting the best overall offer for APR. Once you have found a card with the lowest possible interest rate, remember to charge any purchases that you will not be able to pay off immediately on that card.
Rewards Programs
These are many categories for rewards programs. There are frequent flier cards for those who travel often on airlines. There are cash back rewards credit cards that offer points for each purchase that add up to actual cash back that you can receive periodically. Then there are rewards programs that offer you points towards purchases, cars, and even gift cards. These cards sometimes even offer more points for specific types of purchases, for example gas, groceries, or clothes. But what if you want cash back and points for travel? Instead of choosing between two cards, you could choose to sign up for both cards and then use each one only when it benefits you most. For example, if your cash back card offers 5% for gas purchases but only one point for other purchases, you might want to use the cash back card only when buying gas. Your airline card might only offer you points when you buy tickets, so you may want to save it only for those purchases. And you might have a general rewards cards that offers points you can redeem for only for gift cards or other specific purchases, but it will give you double points on any purchase. That might be the card you use for everything else. That way you can maximize your rewards through careful use of your cards. This approach will only work if you have to discipline to use the cards correctly.
Balance Transfers
You can also take advantage of zero-percent interest cards by using more than one card. Most cards that offer zero-percent transfers will charge the regular APR on any new charges you make. In addition, any payments you make will be applied to your transfer balance before they will apply to those new charges. To avoid adding to your debt and getting charged higher interest, the best idea is to use another card with a low APR or a rewards program that will pay you back for any new purchases while you are paying off the transferred balance on the zero or low APR offer card.
The key to using two cards to your advantage is a discipline, knowledge, and planning. If you are prepared to use all three, then you can have the best of both worlds.