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It may seem convenient to have different cards for different purposes but it can also be challenging to manage them all – and it may cost you more in the long run. At worst, multiple credit cards could lead to debt. But having multiple cards could earn you rewards and save you money.
This guide looks at the different reasons people use multiple cards, how to manage them and what to do if you want to cancel some of them.
If you have or want to use several credit cards, keeping the following tips in mind will help you make the most of each account.
Technically, you aren’t limited in how many credit card accounts you can have open. When you apply for a new card, an issuer is looking at factors like your debt-to-income ratio and credit score when deciding whether you qualify. The number of credit cards you have doesn’t necessarily affect this.
There are a few caveats however. Some issuers will limit your ability to apply for a new card if you’ve opened too many accounts within a certain period of time. The Chase 5/24 rule is one example: you can’t open a Chase card if you’ve opened 5 card accounts within the last 24 months.
Some banks will also limit the number of cards you can have open with them. Discover only allows two cards per cardholder, for example.
Having multiple credit cards can be useful, especially if you pay your balance on time and use the perks. However, if you find it hard to pay your balance on time, or if the annual fee is too high, having multiple credit cards could be a liability. Make sure you weigh the pros and cons before you get another card.
There are many reasons someone might end up with more than one credit card. Usually, it comes down to why they have chosen a particular product, with different credit cards designed to suit specific needs.
Here are just a few of the benefits of having several cards in your wallet:
There are also some reasons you might choose to limit the number of cards you own:
If you find yourself struggling to manage multiple credit card debts, or if annual fees are becoming too expensive, consider consolidating your accounts. If you have cards with no balance, you can simply close those accounts. But if you want to close an account with a balance, there are two main options for credit card consolidation:
Multiple credit cards can offer a wide range of benefits, but keep each account in good standing and cancel any that aren’t working for you.
If you still haven’t found the right card to complement your wallet, check out other credit card options and compare them.
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