4 Reasons to Have More Than One Credit Card

As many consumers are feeling better about having a credit card account now that the CARD Act regulations are in place, it may be a good time to re-evaluate the cards you have. After some years pass, the cards that once fit your lifestyle may not longer be what you need. There is a large variety of credit cards on the market to suit the needs of most consumers. It pays to check out what is available and which cards make sense for you.

It is also important to consider having more than one credit card account at a time. This is not to say that you should apply for every credit card offer that comes your way. Doing so can actually hurt your credit. However, having more than one card does have its advantages.

Here are 4 reasons you should have more than one card on hand:

Boost Your Credit Score

Credit scores are calculated based on a number of mathematical calculations. One factor that influences a credit score is the type of credit you have on file. A good mixture of credit cards, loans, and other types of credit can go a long way to boosting a credit score.

Emergency Back Up

Since one can never truly anticipate when an emergency will arise, it can be helpful to have two credit cards to use should something happen. Be sure to pay off the balances on each monthly so you’ll have access to your full credit limits should an emergency arise. Use one card for regular purchases and keep the other for unexpected situations. Be sure to use your emergency back up card on occasion to keep it active.

Expense/Tax Accounting

When you utilize a credit card to make purchases, the itemized statements that come monthly can make it a snap to see what your are buying and how much you are spending on a monthly basis. Not only are these figures good for tax reporting purposes, you can also use the information to create a better budget. Use multiple credit cards for different purposes such as one card only for gas or auto maintenance and one card only for groceries. Use the statements in whatever way makes sense for your lifestyle and financial accounting methods.

Better Rewards

You may find that several credit card companies offer great rewards programs that benefit your lifestyle but there is not one card that offers multiple rewards. You might want to consider using a cash back rewards card for all general purchases and have separate cards for gas purchases or for rewards based on purchases made at specific locations. Since one card will not contain all of the rewards programs you may benefit from having, it makes sense to use multiple cards to maximize your rewards.

Obviously it is important to never get in over your head with credit cards. If you can spend responsibly and pay off your full balances at the end of each billing cycle, multiple credit card use may be advantageous to you. If you are susceptible to spending temptations when you have various lines of credit, it may be in your best interest to stick with just two credit cards. Use one for general purchases and keep the other for emergency situations.