“Creditors have better memories than debtors.” –– Benjamin
The following is a guest post from Martin of Studenomics. He has just released his premium guide on how you can Completely Conquer Credit. If you're tired of saving money on the little stuff and want to see SERIOUS results you need to check out this guide.
How many credit cards do you have? How many credit cards do you plan on holding in your pocket in one year from now?
The thing with me is that I don't believe in some one-size-fits-all answer. We all live different lives with different goals. This is why systematic personal finance advice is becoming obsolete. I believe in providing a variety of solutions and taking an objective look at everything.This is what I'm going to do today with my look on the idea of holding more than one credit card.
There are a few situations where it makes good financial cents to have a few credit cards. When is this?
When you shop at specific stores.
I just recently signed up for the Target in store credit card. I was impressed by the cashback feature and I must admit that I shop at Target pretty often. Actually, to be honest I do the majority of my grocery shopping there. When you find yourself shopping at the same store repeatedly it makes sense to sign up for their specific credit card it the offer is strong enough. My new Target credit card comes with no annual fee and 5% cashback. The interest sucks but I don't plan on holding a balance.
When you travel often.
There are credit cards that are ideal for those that travel often. It's usually a points based cased with an annual fee that is recommended for anyone that travels. These cards make it convenient when you're booking a trip or when you're making a purchase in a foreign country. I recently had no issues with my credit card while
making purchases in obscure towns in Poland and Hungary.
You have to take the hit here and pay the annual fee so that you can earn the points. If you travel often you'll make this annual fee back easily when you earn free flights. These free flights are much more beneficial than cashback for those that travel frequently.
When you're completely on top of your financial infrastructure.
If you're debt-free and been immersed in the world of personal finance for a long time, you likely won't get hurt with multiple credit cards. Chances are that you know what you're doing. When you're on top of your finances you won't get confused with a few different bills and accounts. Multiple credit cards will allow you to take advantage of benefits and use the credit card to earn some cashback while making your routine purchases.
As my three reasons above indicate, holding more than one credit card in your wallet isn't always a bad idea.
Then there are times where holding more than one piece of plastic in your wallet is an absolutely horrible idea. Not everyone is meant to have more than one piece of plastic.
Let's list those reasons against having more than one credit card:
When you sign up for random credit card offers through the mail.
You can't just sign up for every credit card offer that comes in the mail. This is like marrying the first person that you kiss. You need to sign up for credit cards that you seek out and are valuable to you. Not random offers that appear in your mailbox.
When a store specific card makes you feel loyal to a crappy store.
Has this ever happened to you? The other day I was going to grab some quick groceries with a buddy when he brought up the idea of going to a more expensive store that I didn't care of. The reality was that he wanted to go there because he signed up for an in-store credit card that made him feel loyal to a crappy store. Don't let this happen to you. Only obtain a credit card from a store that you actually shop at
often and not some store that you don't really care for.
When you're disorganized.
You have to be a pretty organized person to stay on top of multiple credit cards. With a few different bills coming in on a monthly basis it's easy to get disorganized and miss a few payments. You don't want to hurt your credit score just because you got more credit cards than you could handle.
Does it make good financial cents to have more than one piece of plastic in your wallet? It's up to YOU to decide now. You have the argument for and against here.
How many pieces of plastic do you have in your wallet? If you have more than one, how did you end up like that?