Managing Multiple Credit Cards | Tips and Benefits

In a country where cash once reigned supreme, credit cards have swiftly become the new kings of convenience. But why stop at one? Many Indians are discovering the power of wielding multiple credit cards, each offering unique advantages. It’s worth exploring this financial strategy and how it can work for you.

Benefits of having multiple credit cards 

• Maximised rewards: Different cards offer varying reward structures. By using multiple cards strategically, you can earn more points, cashback, or miles on every purchase. For instance, use a travel card for flight bookings and a dining card for restaurant expenses.
• Increased credit limit: Multiple cards mean a higher overall credit limit. This can be particularly useful for large purchases or emergencies, providing a financial cushion when needed.
• Diverse perks: Each card comes with its own set of benefits. By holding multiple cards, you gain access to a wider array of perks such as airport lounge access, concierge services, or purchase protection.
• Better credit score potential: Your credit utilisation ratio, a key factor in credit scoring, can improve with multiple cards. By spreading expenses across several cards, you can keep individual card utilisation low.
• Backup payment option: If one card is lost, stolen, or experiences technical issues, having alternatives ensures you're never left without a payment method.
• Currency flexibility: Some cards offer better exchange rates or lower foreign transaction fees. Having multiple options allows you to choose the most cost-effective card for international purchases.
• Interest rate arbitrage: Different cards have varying interest rates. You can transfer balances to lower-rate cards, potentially saving on interest payments.
• Tailored spending: Use specific cards for different spending categories to maximise benefits. For example, use a card with high grocery rewards for supermarket shopping.
• Insurance coverage: Many cards offer various insurance benefits. Multiple cards can provide layered protection for travel, purchases, or even life insurance.
• Financial tracking: Using different cards for various expense categories can help you better track and categorise your spending, aiding in budgeting and financial planning.
  

Potential pitfalls of multiple credit cards 

• Overspending risk: With higher overall credit limits, there's a temptation to overspend. This can lead to accumulating debt across multiple cards, making repayment challenging.
• Complex financial management: Juggling multiple due dates, minimum payments, and varying terms can be overwhelming. Mismanagement may result in late fees or missed payments.
• Annual fee burden: If not chosen carefully, the combined annual fees of multiple cards can outweigh their benefits. This extra cost can eat into any rewards or cashback earned.
• Credit score impact: While managed well, multiple cards can boost your score. However, applying for too many cards in a short time can temporarily lower your score due to hard inquiries.
• Fraud vulnerability: More cards mean more potential points of compromise. You'll need to be extra vigilant in monitoring multiple accounts for unauthorised transactions.
• Reward programme confusion: Keeping track of different reward structures, expiration dates, and redemption processes can be complex. You might miss out on benefits due to oversight.
• Minimum spend pressure: Some cards require a minimum spend to unlock bonuses or waive annual fees. Meeting these requirements across multiple cards can lead to unnecessary spending.
• Credit utilisation challenges: While multiple cards can lower overall utilisation, high balances on individual cards can still negatively impact your credit score.
• Identity theft risk: More cards mean more personal information in circulation, potentially increasing your risk of identity theft if proper precautions aren't taken.
• Temptation to churn: The allure of sign-up bonuses might tempt you to frequently open and close accounts, a practice known as "churning." This can harm your credit score and relationship with card issuers.
  

Tips for managing multiple credit card accounts

• Create a card usage strategy: Assign specific purposes to each card based on their reward structures and benefits. This ensures you maximise returns on every purchase.
• Set up automatic payments: Avoid late fees and potential credit score dings by setting up automatic payments for at least the minimum due on each card.
• Use a budgeting app: Employ a financial app that can aggregate all your card information, helping you track spending, due dates, and balances in one place.
• Regularly review statements: Scrutinise your monthly statements for each card to catch any errors or fraudulent charges quickly.
• Keep track of annual fees: Mark renewal dates on your calendar and assess whether each card's benefits justify its annual fee before the charge hits.
• Optimise credit utilisation: Aim to keep individual card utilisation below 30% to maintain a healthy credit score. Spread large purchases across multiple cards if necessary.
• Set spending alerts: Most card issuers allow you to set up spending notifications. Use these to stay on top of your expenses and avoid overspending.
• Leverage balance transfers wisely: If you're carrying high-interest debt, consider transferring balances to a card with a low or 0% introductory APR. But be mindful of transfer fees and promotional period end dates.
• Store cards securely: Keep unused cards in a safe place at home to reduce the risk of loss or theft. Consider using a digital wallet for day-to-day transactions.
• Regularly reassess your card portfolio: As your lifestyle and spending habits change, so should your credit card strategy. Periodically review whether your current cards still serve your needs.

While managing multiple cards can be rewarding, it's crucial to choose the right mix that aligns with your spending habits and financial goals. This is where the Bajaj Finserv RBL Bank Credit Card shines as a versatile option in your credit card arsenal.

Bajaj Finserv RBL Bank Credit Card benefits

• Earn redeemable points on almost every transaction, with accelerated earnings on online purchases.
• Enjoy dedicated concierge services for a premium cardholder experience.
• Take advantage of discounts and cashback offers across select categories to maximise your purchasing power.
• Benefit from generous welcome bonuses that kick-start your rewards journey.
• Save with fuel surcharge waivers of up to Rs. 1,200 annually, easing your transportation costs.
• Access airport lounges for free and enhance your travel experience.
• Qualify for annual fee waivers by meeting minimum spending thresholds, tailored to your card variant.
• Convert purchases above Rs. 2,500 into easy EMIs, offering financial flexibility when you need it.
• Enjoy interest-free ATM cash withdrawals for up to 50 days, providing short-term liquidity.
• Benefit from monthly discounts and 'buy 1, get 1' offers on BookMyShow movie tickets, adding value to your leisure spending.

By incorporating the Bajaj Finserv RBL Bank Credit Card into your strategy, you can enhance your overall credit card experience, potentially reducing the number of cards you need to carry while still enjoying a wide range of benefits. So, apply today and optimise your credit card strategy.