Credit card payments have never been widely accepted. Others consider it as a godsend for their financial security, while some see it as a gateway to debt traps and irresponsible spending. The majority of people who eventually decide to believe the rumours and inaccurate information of the first group either decide not to apply for or use credit cards or limit their use to one or two cards in order to be “safe.” However, even though many users are unaware of this, how you use credit cards and handle your payments has a significant impact on the role they ultimately play in your financial life.
Let’s get started and check out the benefits and drawbacks of having several credit cards:
Should you keep several credit cards?
How many credit cards you are permitted to carry personally will depend on your spending habits. In addition to receiving higher rewards on spending across multiple cards based on their reward point accumulation programmes, spreading out expenses over the month in accordance with each card’s interest-free period, serving as a backup SBI credit card in the event that your primary card is lost or stolen, and improving your credit score when CUR is kept below 30%, holding multiple credit cards from the same or different issuers offers you a number of benefits.
However, if you’re thinking about acquiring one or applying for another, bear in mind that using and paying your SBI cashback credit card properly is the key to taking advantage of all the perks that credit cards have to offer. You can make sure the benefits always outweigh the disadvantages by doing this. People with bad spending habits and a history of using credit cards excessively have a higher risk of getting themselves into debt traps since they are more prone to overspend and rack up credit card debt.
How can you choose the greatest card when you apply for your next one?
Anyone thinking about getting a credit card should think about their spending habits as well as the benefits and drawbacks of the various commonly available credit cards before making a choice. If you frequently spend more money on travel and lodging than other expenses like shopping or dining out, use a travel credit card. When used for travel-related spending, these cards offer additional benefits.
It is crucial to carefully analyse all the features offered by each card while conducting a comparative cost-benefit analysis before choosing the SBI credit card whose benefits outweigh its annual fee by the biggest margin. Keep in mind that when you charge more than a certain amount on a credit card, you sometimes have the choice to forego or reverse joining or yearly fees.
Benefits of having multiple credit cards
-The potential for gaining more benefits
Due to the varied usage and spending patterns of different consumer categories with various habits, lifestyles, incomes, regions, etc., credit card issuers often build SBI cashback credit card reward point programmes in accordance with the defined purpose of consumers.
For instance, credit card companies offer frequent travellers a selection of travel credit cards. These cards offer additional benefits in addition to free lounge access, air miles, a variety of hotel discounts, and higher reward points on travel-related purchases. For people who frequently spend a lot of money on various goods, such as travel, petrol, shopping, etc., having two or more credit cards may be advantageous.
-Decreases CUR to aid in improving credit score
You can lower your credit utilisation ratio, which measures how much of your overall credit limit you actually use as a client, by using two or more credit cards. Keep track of your credit card usage, limit it to no more than 30% of your available credit, and pay off any balances immediately. When your CUR surpasses 30%, credit agencies have a tendency to reduce your credit score. Your credit score can be raised and maintained by all of these.
If at all feasible, please extend the applicable interest-free term.
The interest-free period is the length of time between the date of a credit card transaction and the conclusion of the billing cycle. No interest will be charged on credit card transactions during this time, with the exception of cash withdrawals made using a credit card, so long as the whole amount is paid before the due date. This period is normally between 18 and 55 days for the majority of credit card issuers, depending on the date of the SBI cashback credit card transaction(s). By splitting scheduled purchases, particularly large ones, between their cards in accordance with how much of each card’s available credit is left, users of two or more credit cards can extend the length of their interest-free periods. You will have more time to repay them when the time comes.
-Acts as a fallback in case another card is misplaced.
If your primary SBI credit card—the one you use the most—is ever stolen or lost, it normally takes a few days before you can acquire a new replacement card. To maintain your purchasing power and liquidity in this case, spread out your purchases over your two or more credit cards if you have them. If you only have one credit card, apply for a second one right away to start taking advantage of all the benefits that come with having two or more cards.
The drawbacks of having several credit cards
While paying off debt, preserving financial responsibility
People without good money management habits run the risk of exceeding their allotted spending limits to take advantage of such discounts and offers because most credit cards, regardless of brand or issuer, tend to encourage spending by offering enticing discounts and other promotions throughout the year.
Your credit score will momentarily decline if you apply for a second credit card.
After receiving your new credit card application, the concerned credit card issuer pulls your credit report to evaluate your creditworthiness when you apply for a credit card, or any other SBI credit card or issuer. Remember that even though these lender-initiated credit report inquiries may temporarily reduce your score by a few points. You might be able to rebuild your credit over time if you use credit cards sensibly and pay your bills on time.
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