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Is having many credit cards good for your financial health?

  • Highlights

  • Multiple credit cards offer various money-saving benefits

  • Bills of many credit cards are harder to keep track of

  • The risk of overspending is higher with several credit cards

  • The SuperCard offers benefits of 4 credit cards in 1

Over the years, credit cards have evolved to facilitate almost every transaction possible while offering a suite of benefits. For example, a fuel/auto credit card is designed to cater to your refuelling needs and can save you a significant amount in surcharge fees. Likewise, a dining credit card may offer you accelerated reward points or free meals when you eat at partner restaurants. As a result, since credit card benefits are aplenty, you may be tempted to apply for multiple credit cards to address various needs. Take a look at the pros of doing so.

Helps you build your credit score

Having a number of credit cards to your name can boost credit score tremendously, provided you manage them well. An important factor in this regard is your repayment behaviour. Regularly paying credit card bills in full improves your credit history as it shows that you have the requisite financial discipline to managed borrowed finances.

Gives you access to an array of credit card benefits

Credit cards are of different types, and each one has its own advantages. For example, the Bajaj Finserv RBL Bank SuperCard offers you discounts on food that you order through Zomato. Alternatively, a travel credit card offers deals and discounts on hotel stay and travel tickets, as well as accelerated air miles. Depending on the type of credit card you choose, you’ll enjoy a unique set of benefits. Having a mix of various credit cards ensures that you get rewards whenever you purchase a product or service.

Helps you maintain a low credit utilisation ratio

Your credit utilisation ratio is a measure of how much credit you use in a month versus your total credit limit. Having multiple cards to your name translates into a higher credit limit and when coupled with careful spends, this can help you maintain a low credit utilisation ratio. Having a ratio under 30% is a good sign as you’re viewed as someone who doesn’t misuse credit.

In a nutshell, more than one credit card translates into multiple credit card benefits that are up for grabs. However, there are some risks to owning several cards as well. Read on to know more about what they are.

Shopping online made easy with the SuperCard

The possibility of overspending

Having a number of credit cards can cause you to overspend, especially if you’re an impulsive spender. It is a common pitfall, but one that you can avoid by budgeting and tracking your expenses.

Having to track and pay many bills

Owning many credit cards means paying more than one bill. In turn, it means that you’ll have to keep track of several billing cycles and payment deadlines. This may have you calling the credit card customer care number time and again, especially if you’re disorganised when it comes to saving statements, for example. Therefore, if you’re forgetful, it’s best to set reminders for each credit card, or automate bill payment so that you don’t end up accumulating late fees, penalties and high interest payments. Moreover, note that consistently defaulting will certainly harm your credit score.

Additional Read: How to check credit card balance online

The risk of coming across as credit hungry

If you apply for many credit cards at once, you may come across as credit hungry. This is because each request will be noted in your credit report. Making several hard inquiries in a short span of time will make you seem credit hungry. In other words, you’ll come across as someone who’s living beyond their means. In turn, issuers may associate a higher degree of risk with your application and reject it.

A crucial factor in owning many credit cards is using them smartly. Maintain healthy spending habits and be diligent with your payments to ensure you enjoy all the benefits without running the risk of accumulating debt.

Alternatively, choose a credit card issuer that offers you a bouquet of benefits with a single card. Picking a credit card that serves many functions is not only more beneficial, but also more cost-effective. The Bajaj Finserv RBL Bank SuperCard, for example, is one credit card that offers the benefits of 4. Apart from being a credit card, the SuperCard lets you withdraw cash from ATMs on an interest-free basis for 50 days, allows you to borrow an interest-free personal loan for up to 90 days and convert spends of Rs.3,000 or more into easy EMIs. It also offers fuel surcharge waivers, travel discounts, deals on entertainment and a range of other deals on clothing, electronics, healthcare and more. To access all these benefits and more in an instant, check your pre-approved offer from Bajaj Finserv and use it to get hassle-free approval.

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