Offers, rewards, cashbacks, and more: what’s not to love about credit cards, right? If you have a credit card or two and love shopping with them, you may have a very important question: How many credit cards can you have?
The short answer is that there’s no magic number to that question. It all depends on various factors, as we’ll see in this article.
Most people typically have around 2 or 3 credit cards. If you are a beginner, you can start with having just one credit card and eventually apply for more. That said, how many credit cards are too many credit cards? And what are the ups and downs of having several credit cards in your personal finance portfolio?
Let’s find out!
Officially, there is no cap on the number of credit cards you can have in India. You can apply for and own as many or as few credit cards as you want. This means you can have just 1 credit card or even ten cards, depending on your eligibility. That said, owning many cards has many distinct advantages and disadvantages. Check them out below.
Having multiple credit cards can benefit you in many ways. Here are the top upsides of owning several cards.
Having multiple credit cards improves your overall spending capacity. You can spend up to the credit limit on each card (although it is advisable to use just around 30% of your total credit limit). With a higher spending capacity, you can make premium purchases and pay for big-ticket items more easily.
If you have multiple credit cards and pay all the credit card bills on time, you can also get the advantage of a better credit score. Furthermore, since you have many cards, it is easier to distribute your expenses across all of them, so you can keep the credit utilisation ratio below 30% on each card. This, in turn, also positively affects your credit score.
Credit cards today offer a wide range of rewards, cashbacks, deals, and discounts. Needless to say, the more cards you have, the more rewards and offers you get to enjoy overall. You can take advantage of these benefits to get better prices when you shop online or book flight tickets.
There are also some downsides to having too many credit cards. Check them out below.
Having too many credit cards can quickly lead to a debt trap if you are not careful. Failing to pay your card bill can lead to high interest, often at 24% or more per annum. To pay this, you may have to avail yourself of another loan, thus leading to an endless cycle of borrowings. If you are unsure if you can manage many cards at once, you can always limit the number of cards you have to 2 or 3.
Every credit card comes with various charges such as a joining fee, an annual fee, international transaction charges, a cash advance fee, and more. It goes without saying that if you have multiple credit cards, you will also have to pay all the necessary fees. This could add up to a fair amount of outlays, depending on the type of cards you have and the fees they come with.
This should give you a fair idea about the answer to the question — how many credit cards can I have? Remember that the answer to this question can vary from one point in your life to another. So, ensure that you have the optimal number of credit cards in your personal finance portfolio, and use them prudently and carefully to avoid falling into a debt trap. Remember the advantages and disadvantages of having too many cards and take steps to avoid these pitfalls.
There is no upper limit on the number of credit cards you can have in India. Ideally, you can have any number of credit cards as your financial profile allows you to be eligible.
In India or elsewhere, having multiple credit cards is a double-edged sword. It can be a good thing as long as you use your credit cards prudently. On the plus side, credit cards help you improve your credit score when you pay your dues on time. And they increase your financial liquidity. But on the downside, if you are not careful, you may end up with a significant amount of credit card debt, which carries a high interest rate.
When it comes to how many credit cards you should have, there is no magic number. Having two to three credit cards is typically advisable if you do not have any other major liabilities in your portfolio. That said, you can have more or fewer credit cards as per what suits your specific financial persona and requirements.
Applying for too many credit cards at once can hurt your credit score. That said, having many credit cards in your portfolio does not adversely impact your credit score. Your credit score will only suffer if you have too many unused lines of credit or if you do not pay your credit card bills on time.
