How to Manage Multiple Credit Cards

The existence of credit cards has been a boon and a bane. With the lucrative offers, they have changed the way transactions occur for credit cardholders. Now, you no longer have to take a hit on your budget if you have a big purchase coming up. There is an option of availing low-cost EMI offers or going for the buy now and pay later mechanism. The lucrative rewards and offers can upgrade your travelling or shopping experience. And the global acceptance of credit cards makes transactions easier. 

Your credit card usage influences your credit scores. It is essential to choose the credit cards which align with your budget and spending habits. Keeping multiple credit cards can be beneficial but are often mismanaged. A few practices can help you optimise your use of credit cards and may help you keep your credit score in check.

Opt for credit cards that align with your needs. Some factors o keep in mind are budget allocation, credit limit, interest rates, benefits, annual fees, and penalties. The core benefits of different cards aim at different spenders. Some cards offer reward points or cashback for shopping, which is ideal for people who shop frequently, and some cater to travellers in the form of travel cards. 

One of the most common reasons for staying credit card-averse is the fear of falling into a debt trap by not paying dues timely. This problem can be solved by either linking with your savings account or keeping monthly reminders on calendars or other apps.

It is advisable to review credit reports regularly to not miss out on unpaid dues while keeping a detailed track of expenditure. Before opting for a specific card, always make sure to read the fine prints to familiarise yourself with the terms and conditions.

Plan your transactions so that all the benefits of credit cards are utilised in the best way possible. Spread out your transactions to accrue higher benefits. Do not forget to redeem the accrued benefits before the expiration date. You can also keep different cards for different purposes. 

Consider holding on to older credit cards with good credit history. Good credit history will positively influence your credit scores. And remember, keeping multiple credit cards can be highly beneficial if you take a disciplined approach.

For any clarifications/feedback on the topic, please contact the writer at jyotsna.singh@cleartax.in

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