You might be looking at your own wallet and wondering: Should I get a second credit card?
It turns out having two credit cards might be better than one.
Getting another card can help you save on interest or rack up reward points.
Wonderinghow many credit cards is too many? Having multiple cards isn’t always a good thing.
Our team has compiled alist of creative waysyou can fatten your bank account this week.
This is a long list, so dont get overwhelmed.
Well keep it updated as offers changes or expire.
Here are four times when it makes sense to add a second piece of plastic to your wallet.
Your Credit Score Has Improved
A higher credit score makes you eligible for better credit cards.
Youve demonstrated it’s possible for you to manage a credit card responsibly without racking up debt.
Credit card issuers like that.
Did you know?
Perks can include a lower interest rate, more robust rewards, enhanced benefits and overall better terms.
You Want Better Rewards
Two credit cards can help you earn rewards faster than one.
you’re free to also use asecond card to earn rewardsand benefits your first card doesnt offer.
Or you might consider getting a second card that offers 3x reward points on all grocery and restaurant purchases.
Youll enjoy no interest on your new card during the introductory period.
Having a second credit card can also help cover a large unexpected expense.
you’re able to split the bill between two cards, which might help your overallcredit utilization ratio.
Dont get a second card if youre nearing the credit limit on your first card and need more money.
Simply dont do it.
While balance transfers can be a great tool, they require lots of financial discipline.
Failing to pay attention to the terms of the balance transfer deal could plunge you deeper into debt.
If getting a second card will only tempt you to spend more money, skip it.
Similarly, applying for multiple credit cards within a year can ding your credit score.
(Your credit takes a hit every time a financial institution does ahard pull on your credit report.)
What to Look for in a Second Credit Card
Knowinghow to choose the right credit cardis important.
Here are a few factors to consider when youre shopping for a second card.
Getting a second credit card can boost your score by decreasing your credit utilization ratio.
Lets say your credit limit is $5,000 and you spend about $2,500 on your card each month.
Your credit utilization ratio is 50%.
You should aim to keep your utilization ratio under 30%.
Under 10% is ideal.
In general, no, you should keep your other credit card accounts open.
Having a second (or third or fourth) credit card that you seldom use decreases your utilization ratio.
Thats a good thing.
When you close a credit card, youre wiping away a big chunk of your total available credit.
But in general, leave the accounts open.
No, not if you use them responsibly.
But having four or more credit cards might not be that beneficial either.
Heres why: It can be difficult to manage multiple cards and due dates.
Plus credit card annual fees can chip away at your rewards.
Card benefits are also more likely to overlap if you have multiple cards.
Your credit score will take a small, short-term hit when you apply for a new card.
Your score could dip by 5 to 10 points for each hard inquiry on your credit report.
It may also temporarily lower your score by decreasing the overall average age of your accounts.
Rachel Christian is a Certified Educator in Personal Finance and a senior writer for The Penny Hoarder.
Probably not as good as youd like.
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