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Having multiple credit cards can be a good thing. Of course, you should use them all with care. Only spending what you can afford and paying your entire statement balance in full every month is the best strategy to avoid credit card debt.
Many people use credit cards to earn rewards, and you can, too. Let me explain why you may want to consider having several rewards credit cards in your wallet.
1. Maximize your rewards
One of the top reasons to consider having multiple rewards credit cards is to maximize your rewards. How each credit card earns rewards can differ.
Some cards offer flat-rate rewards on every purchase — like 2% cash back no matter what you buy. Other cards offer bonus rewards on select spending categories. You might earn 3 points per $1 on dining purchases made with your card.
Having more than one card can allow you to boost your rewards. You can make strategic decisions with what credit card you use to pay for certain purchases so you earn more rewards overall. This is something that many rewards credit card enthusiasts do.
Here’s an example of why having multiple rewards can help you earn more rewards:
Card No. 1: Earns 3 points on travel spending
Card No. 2: Earns 3% back on grocery purchases
Card No. 3: Earns 2% flat-rate rewards
Using card No. 1 to pay for all your travel bookings and card No. 2 when buying groceries is smart. You could then use card No. 3 to pay for other everyday purchases outside those bonus categories. A strategy like this can help you earn more rewards in the long run.
2. Earn rewards faster through welcome bonuses
Many rewards credit card enthusiasts take advantage of welcome offer opportunities. Many credit card issuers promote welcome offers to eligible new customers. If you meet the minimum spending requirements, you can earn a sizable amount of points or miles.
If you’re planning to make a larger purchase soon, it may make sense to add another rewards credit card to your wallet to earn rewards faster through a welcome bonus. Just make sure you can meet the minimum spending requirement without overspending beyond your means.
3. Maintain a lower credit utilization
Having multiple credit card rewards can also be good for your credit. One factor that makes up your credit score is your credit utilization ratio, or how much available credit you use. Having a lower credit utilization ratio is ideal — you don’t want to use all of your available credit.
By having multiple cards and not using all of the available credit for each card, you can maintain a lower credit utilization ratio, which can benefit your credit score.
4. Access more card benefits
Many credit cards include useful card perks. The benefits provided can vary by card. Because of this, having more than one credit card can help you access more perks.
If you’re looking for ways to improve your life, research the benefits provided by different cards. You may get value from having more than one card because of the ability to access more benefits.
Don’t be afraid to use more than one credit card
Thinking of getting another credit card? It’s best to apply for a new credit card after exploring how your actions will impact your finances and credit. But don’t assume having two or more rewards credit cards is a bad choice. It may be a good option for you.
Check out our list of the best cash back credit cards to learn more about the top cash back card picks.
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