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Pros & Cons of multiple credit cards |
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While the situation may have changed a little of late, traditionally
many of the US population carry more than one credit card. There are
many pros and cons with regards to carrying so much potential credit but
it all really comes down to how sensible the person is and how much self
control they can summon. While they say money is at the root of all
evil, for some people credit cards are not too far behind!
So what are the pros and cons of carrying multiple credit cards?
PROS
Credit
The very fact that you have more than one credit card available will
probably substantially increase the amount of credit which you have at
your disposal. No matter how good we are at financial planning there
will always be situations where money may be required at short notice (e.g
car repairs, health costs, etc) and you may need to call upon extra
financial assistance.
Options
Many people choose to carry multiple cards purely so that they have the
option to use at least one credit card at any retail outlet. Exactly
which cards certain outlets will accept or not accept is purely down to
the company and by having more than one option it limits the chances
of being caught with a card which you cannot use.
Payment Terms / Rewards
While traditionally the payment terms of most credit cards are fairly
standard, they can differ in certain circumstances with some cards
allowing you to transfer existing balances at 0% until they are paid off.
There is also the situation of rewards with many cards offering some
kind of points reward system for users. Many people have been known to
use their cards to gain the rewards on offer and pay off the full amount
at the end of each month.
Safety
While this can also be a negative side to carrying more than one card,
there is the situation where you either lose one of your cards or it is
stolen. If you have another card then you will still having credit to
hand, but if you have no other cards then you may be left away from
home with no funds.
CONS
Safety
As we touched on the subject of safety above there is also a downside
to having more than one card in your possession, the chance that all of
your cards may be stolen and used fraudulently. This is a situation
which many people feel will never happen to them, but the same people
would be very surprised to see how common credit card fraud actually is
and how much it can cost!
Temptation
The more credit which you have at your finger tips the more likely some
people are to become tempted and spend beyond their means. It can be
very easy to spend, spend, spend and convince yourself that you will be
able to pay back the amounts in question. However, history has shown
that those who get into deep credit card debt can often be paying
massive interest for a large period of their lives.
Control of Your Finances
This is perhaps the hardest aspect of multiple credit card use for many
people to understand before it is too late. It can be very easy to
spend, spend, spend whereby you subconsciously add up what you think is
outstanding on your credit cards. Too many people in this situation
have been known to miscalculate the full extent of their debt and before
too long they are in over their heads and struggling to repay the
interest never mind the original capital!
Conclusion
While it is easy to get a feel of how multiple credit cards can hinder
and help with your everyday life, by looking at the points we have made
above, it really comes down to how the person involved is able to
organize themselves and restrain from spending above their comfort zone.
While there will be situations where you require instant credit, where
possible you should also consider the consequences before hand and
exactly how you plan to pay the money back – whether you transfer your
credit card debt into a fixed loan, or plan an increased repayment plan for
yourself.
Credit is a necessity for many people and without credit cards the
retail activity of the US consumer would be reduced drastically and have a
major impact upon the US economy. Credit is not the problem, it is how
you use it and the respect you give to it which can lead to problems.
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