If one thing has become more common, it is for someone to have more than one credit card. Whether that’s good or bad depends on your point of view. Starting from the financial premise, it can be something favorable, as long as there is a balance between willingness and power to spend.
So if you are just thinking of having another credit card, wait! Take a few minutes to read this article to understand four good reasons for having more than one credit card.
1. To separate daily expenses from big financing
Having your money and credits organized is vital to stay in control. Experts recommend having a credit card to pay your daily expenses (groceries, gasoline, etc.) and another for purchases that you want to finance in the longer term. The daily spending card should be a reward credit card like HSBC +Rewards™ Mastercard or cash back credit card like Scotia Momentum® VISA* Infinite card. Make sure you pay the complete balance on this card at the end of the month. The card for long-term financing must be a low interest credit card for easy repayment. The above will allow you to visualize your current expenses and how much you owe on your credits.
2. The card you currently have is not accepted in all establishments
If you find yourself in this situation and want to apply for more than one credit card, you must be aware that you will use it only if you require it. Otherwise, you could get out of control and end up paying more than what you already have budgeted to pay on credit cards. Use it in an emergency and immediately liquidate it on the payment date. For example, Amex cards are accepted by 99% of the merchants that accept credit cards, but they are still not as widely accepted as Mastercard and Visa. So, having another credit card like National Bank Allure Mastercard® or CIBC Dividend® Visa* Card is not a bad idea if you can avoid impulse spending.
3. For emergencies
If there is no doubt that you will only use it if you need to cover the payment of an accident, medical, etc., there is no downside. However, we recommend you choose a low interest card like National Bank Syncro Mastercard. Or a card with no annuity fee like MBNA True Line Mastercard. Make sure you don’t carry this card in your wallet and keep it locked up to avoid the temptation to use it for anything other than an emergency.
4. You want to transfer the balance of your current credit card to another with low interest
This involves moving your debt on an expensive card to another that charges you less interest. In this way, you save on financing charges, and you will have more money available to pay the principal of your debt. It is worth mentioning that for this strategy to fulfill its purpose, you will have to cancel your expensive card once you have transferred the balance to the low interest balance transfer card. If you want to know a little more about this strategy to reduce interest payments, click here to read our article on how credit card balance transfer works.
Having more than one credit card is feasible, but you need to assess the conditions. You have to remember that it goes far beyond just getting a release. Another condition that you need to consider is the control and monitoring of expenses to manage your finances.