Does It Make Sense To Have Multiple Credit Cards?

• Different credit cards offer different benefits, including cashbacks, rewards and discounts
• Some cards come for specific expenses such as on travel, food or shopping
• Opt for multiple cards if you are sure you will use the different features and avail of the benefits
• Remember to handle multiple billing cycles adeptly to avoid falling into a debt trap
• Ideally, stick to two-three credit cards with different features, as per your usage and lifestyle

The use of credit cards is steadily increasing with more and more people taking to digital transactions. During 2021-22, payment transactions carried out through credit cards increased by 27 per cent in volume and registered a rise of 54.3 per cent in terms of value, according to the Reserve Bank of India Annual Report 2021-22 released recently.

With the industry expanding, there are several types of credit cards available in the market now.

However, so how many cards should a consumer ideally have?

Different Cards, Different Benefits

Some credit cards can be used only for general expenses, while some come with specific features or are meant for specific expenses such as travel, fuel or dining. Also, different credit cards come with different offers such as discounts, rewards, cashbacks, accumulation of air miles, access to airport lounges, club or gym memberships and more.

For example, SBI Card Elite offers vouchers to its customers for shopping from premium brands. It also offers complimentary lounge access and claims to have higher reward points than other cards. Similarly, HDFC Regalia credit card also offers lounge access, apart from benefits on dining, travel and shopping.

Some credit cards also have tie-ups with specific brands and even e-commerce websites. For example, Amazon Pay ICICI card offers you specific benefits if you shop from Amazon.

How Many Cards Should You Have?

If you are among those who like to enjoy different benefits and would want to use the various features offered by credit cards, you may end up with multiple credit cards offering different features.

Having different cards can help you reduce expenses on specific categories such as fuel or air ticket purchase. Also, they can help you avail of cashbacks and other benefits if you organize your buying and spending well. Also, each card may have limited period offers and specific benefits—for instance a credit card from one lender may get you discounts for shopping from one grocer, but not at your favourite e-commerce website, and vice-versa. Moreover, you can also use the interest-free period to the optimum, but it will need careful planning.

While you may keep as many credit cards as you can comfortably handle, there could be a catch if you slip up in terms of payments. Since handling too many credit cards can be a cumbersome process, you should have them only if you are highly disciplined in terms of repayment. If credit cards are not used smartly, you may end up missing some of the payments and accumulating debt in the long term.

Also Read: Different types of credit cards in India

According to experts, if you are unable to deal with different billing cycles of different credit cards in an effective manner, you should put a limit on the number of credit cards you use. For instance, if you are a frequent flyer, you may have two credit cards—for regular expenses and travel-related expenses—and no more. On the other hand, if you use your car to travel long distances for work on an everyday basis, you may prefer to have fuel and regular credit cards.

Ideally, you should not have more than two to three credit cards, each with different features that align with your usage and lifestyle. But remember to pay your bills on time.

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