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I currently have one credit card, and I was thinking of applying for another one since my current card is Amex, and not many stores support that, so I'm thinking of getting a Visa or Mastercard one.

Aside from the said reason, what other benefits or reasons are there to consider getting more than one credit card?

Take note that this is not about switching to a lower interest rate credit card, but it's about holding and using separate cards simultaneously. I've seen some people with lots of credits cards but never fully understood why they needed more than 2 or 3.

  • 3
    At least in Canada, your credit score is affected by the age of your cards. Having only one would effectively force you to keep it open forever or suffer a huge hit. – Vaughan Hilts Mar 3 '15 at 19:56
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    Many years ago, I was about to buy gas to make a 300 mile trip home. I had only a single card at the time, and unbeknownst to me it had be frozen due to it having been stolen and use on the other side of the country the night before. Luckily I had enough cash. Soon after that I acquired a second card that I never use unless the first has been frozen/lost/ect. – Lawtonfogle Mar 3 '15 at 21:21
  • 1
    An important point to consider for all the answers, is: in your specific case, do these reasons outweigh the reasons not to own multiple credit cards? – Andrew Grothe Mar 5 '15 at 17:58

14 Answers 14

58
  • In case one card is rejected for a payment, whether for a valid or invalid reason
  • In case one card company suffers an IT failure and that card can't be used at all
  • So that on holiday you can carry one card with you and keep the other in your hotel safe, and you won't be left without means of payment if your wallet is stolen
  • To get a higher credit limit than one card alone will give you
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    Failure of Information Technology. – Digital Chris Mar 3 '15 at 16:01
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    IT Failure examples can be their network has been compromised or is down, there is a bug in their authorization services, their account information data is lost or corrupted, etc. Even if they guarantee a 99.99% uptime, you don't want to be stuck with just one card on that 0.01% time it is down (and that doesn't include other possible IT failures like a software bug). – Steven Kohus Mar 3 '15 at 16:42
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    IT Failure : The network guys may have not yet tried to turn it off and on again. – Mark Gabriel Mar 3 '15 at 16:45
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    I'd add reward cards (mentioned in other posts) and Debt-to-credit ratio as an ancillary to Higher Credit Limit. Otherwise, solid list. Many failures are a reason to carry cash as well (what if IT failure is at the gas station and you are on E?) – WernerCD Mar 3 '15 at 20:33
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    I'd suggest having one card for important and/or trusted recurring purchases. When and if your main card is compromised, you don't impact your utilities, insurance, whatever payments. – Stephen Mar 3 '15 at 20:40
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In the case of reward cards, different cards may offer different rewards for different kind of purchases.

For example, in the UK, one of the Amex cards offers 1.25% cashback on all purchases, whereas one of the Santander cards offers 3% on fuel, 2% or 1% on certain other transactions, and nothing on others. Of course, you then have to remember to use the right card!

Another reason is that a person may use a card for a while, build up a good credit limit, and then move to a different card (perhaps because it has better rewards, or a lower interest rate, etc) without cancelling the first.

If it costs nothing to keep the first card, then it can be useful to have it as a spare.

  • 1
    Definitely this. For shopping it is nice to have a Visa, Amex and Discover, because they all have different benefits. For Visa, you will see a lot of deals on items that require you to use Visa checkout (often on Newegg.com, for example). Discover traditionally has the best bonus cashback for using ShopDiscover/Discover Deals. In the holiday season they usually give you an additional 5% cashback on top of whatever you get through ShopDiscover, so can easily get 10-15% cb. Amex has a lot of deals pop up around xmas where your online account gets 'offers', often something like $25 off 100. – Kik Mar 3 '15 at 18:42
  • +1 Another common rewards-related reason to hold a card is the case of airline cards. If you do a significant amount of flying, it is often worthwhile to get your airline's card just to purchase your flights. The mileage rewards can be very significant, as can things like avoiding checked baggage fees. – reirab Mar 5 '15 at 21:59
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Another reason is that the amount of unused credit you have is a positive factor on your credit score. It's generally easier to open several different accounts for $X dollars each with different banks than to get your current bank to raise your limit severalfold in a single go. Your current bank has to worry about why you suddenly are asking for a large additional amount of credit; while other banks will be willing to offer you smaller amounts of credit in the hope that you transfer your business from your current bank to them.

  • I have two credit cards that offer free credit score tracking. Both of them reported gains of ~10 points on my score from both 1) opening a new credit card despite the hard credit inquiry and 2) an existing card deciding to double the provided credit line with no action or request on my part. Digging deeper, these trace back to having a higher total credit limit and therefore a lower credit utilization percentage, which both trackers report as being 'very important' to my credit score. So +1 to you. – Dacio Mar 3 '15 at 16:30
  • The number of lines of credit (car, house, credit cards, student loans, etc), the average age of those credit lines, and payment history play a large role in determining your credit score. Good to have several credit cards just to build a good credit history (the early impact may be negative if too many hard credit inquiries or too much at once - but long term effects will be positive if you pay them on time). – Steven Kohus Mar 3 '15 at 16:44
  • Yes. Additionally, you should avoid having your highest balance on a card be more than 30% of your maximum balance. For small balance cards, 30% can be quite a small number. As I built up my credit, I would split some larger purchases amongst cards to prevent going over 30% of any individual card's balance. However, besides hard inquiries, low average length of accounts also adversely affects your credit rating. So, new, even unused, credit cards can potentially drop your score by lowering your average account length. – Web Head Mar 5 '15 at 4:44
9

A friend of mine has two credit cards. He has specifically arranged with the card issuers so that the billing cycles are 15 days out of sync. He uses whichever card has more recently ended its billing cycle, which gives him the longest possible time between purchase and the due date to avoid interest.

8

I have a fair number of cards floating around some reasons I have opened multiple accounts.

  • Sign up bonuses which range from $100 to $500. I am not generally interested in bonuses less than $250
  • When a card gets locked because of fraud having a couple of cards makes life much easier. I don't use cash and don't want to deal with my bank over an issue with a debit card so I never use a debit card.
  • More credit across more cards diminishes the affects of high utilization on a single card. Particularly when carrying a bunch of 0% balances. There used to be significant arbitrage opportunities with 0% offers that don't currently exist right now.

I am not saying that it is for everyone but there are valid scenarios where multiple credit cards can make sense.

  • 1
    In addition to signup bonuses, many offer initial 0% interest for a year or two. So I sign up for card A, put all my charges on it for a year, then pay it off before it incurs interest. Then sign up for card B, then card C... Essentially I have a permanent 0% loan of $7-10K, which I've invested in my mutual fund account. – jamesqf Mar 3 '15 at 18:17
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    Also, in the case of airline miles, the signup bonuses can be even higher if awarded in mileage. I've received over $800 worth of flight credit on Southwest and thousands on Delta this way. – reirab Mar 5 '15 at 22:02
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Many reasons mentioned already. The reason why I have multiple is missing:

I have a personal card for my private use and a company card for company use.

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    More generally, to make record keeping easier. Using different cards for different types of purchases. Daily expenses, Travel expenses, Renovations, etc. – Chris Cudmore Mar 4 '15 at 15:08
3

Another good reason: if you have to replace a card due to damage, loss, or identity theft it's nice to have a backup you can use until the new card for your primary account arrives.

I know folks who use a secondary card for online purchases specifically so they can kill it if necessary without impacting their other uses, online arguably being at more risk.

If there's no yearly fee, and if you're already paying the bill in full every month, a second card/account is mostly harmless. If you have trouble restraining yourself with one card, a second could be dangerous.

2
  • When you travel abroad, some places only take one type of card, so carry multiple cards (e.g. carry a Visa and Mastercard)
  • One for work expenses so they don't get mixed up with personal
2

3 reasons I can think of:

  1. I once worked for a bank and when credit scoring for loans, if you had been approved by different institutions, you were given a better score. So if you held a Visa and Mastercard (as opposed to two Visa cards) your credit score would go higher. More than 6 cards though looked suspicious and your score would take a big hit.

  2. Having more than card has helped me when getting special offers multiple times from some websites where it was limited to "one per customer" though most just used your address or email account.

  3. If you owed $1000 in total which you can't pay off in one go, it is better to have that split across two cards. You would be paying interest on $500 on each card but when you have one card paid off, the interest you would be paying on the other would be based on the original debt to that one card of $500 (not $1000). I hope that makes sense.

1

1- To max out rewards. I have 5 different credit cards, one gives me 5% back on gas, another on groceries, another on Amazon, another at restaurants and another 2% on everything else. If I had only one card, I would be missing out on a lot of rewards. Of course, you have to remember to use the right card for the right purchase.

2- To increase your credit limit. One card can give you a credit limit of $5,000, but if you have 4 of them with the same limits, you have increased your purchasing power to $20,000. This helps improve your credit score. Of course, it's never a good idea to owe $20,000 in credit card debt.

0

I keep one card just for monthly bills (power company,car loan, etc.). This one is unlikely to get hacked so I won't have to go change the credit card information on my monthly bills. I pay the credit card from my bank account. I just don't want a lot of businesses with direct access to my bank account.

  • Firewalling different transactions into different accounts is a good reason to have multiple cards. – ChuckCottrill Mar 11 '15 at 23:11
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Someone mentioned sign up bonuses but only mentioned dollar values. You might get points, sweet, sweet airline points :) which some might find compelling enough to churn cards so they always have a few open.

  • This should be a comment to an answer. – mhoran_psprep Mar 5 '15 at 11:54
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I got a Capital One credit card because they don't charge a fee for transactions in foreign currencies. So I only use it when I travel abroad. At home, I use 3 different credit cards, each offering different types of rewards (cash back on gas, movies, restaurants, online shopping etc).

-4

There is almost no reason to get a second credit card - this is a very good arrangement for your creditor but not for you.

Credit cards have high rates of interest which you have to pay unless you pay the credit off every month. Therefore, increasing your total credit capacity should not be your concern.

Since internet technology lets you pay off your balance in minutes online, there is no reason to have multiple cards in order to avoid running out of a balance.

If, on the other hand, you do not pay your existing card off every month, than getting another card can be even more dangerous, since you're increasing the amount of debt you take on.

I'd say at most it would make sense for you to grab a basic VISA, since most places do not accept AMEX. I would also considering cancelling the AMEX if you get the VISA, for reasons above.

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    "There is almost no reason to get a second credit card" There are TONS of reasons. Different vendors (Discovery, Mastercard, Visa, Amex), Reward Cards (I have a card that gives 2% on gas... another gives 2% on groceries), balance (more cards, more available credit, better debt-to-credit ratio), backup, etc. – WernerCD Mar 3 '15 at 20:32
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    And the interest rate is only an issue if you aren't going to pay it off. I have half like 7 cards open for various reasons (that includes cards owned by my wife that I'm named on, and a couple I applied specifically for specifically for the signon bonus, which I intend to cancel once it wouldn't look suspicious, but also multiple I applied for personally, have open and intend to keep open). Some of them probably have ludicrously high APRs, but I didn't pay attention and don't really care. And total capacity does help - with your credit score (if you aren't using it.) – neminem Mar 3 '15 at 23:38
  • I think both comments are very fair. I would like to see an article weighing the benefits of various cards against their annual fees – Code Whisperer Mar 4 '15 at 1:40
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    @itcouldevenbeaboat between me/fiance: Master/Visa each, shared discover, sears, amazon, lowes... maybe a couple others. No annual fees on any of them. Tons of resources to find fee-free cards available. The only time we've paid interest in recent memory (once we got out of debt after my career change) was when we put a new shed on one card and it took longer than the 6 months no interest to pay it off - and that was because that was still cheaper/easier than "rent-a-center" style payment plans and we needed the shed "now" - but that interest was a choice. – WernerCD Mar 4 '15 at 3:01
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    @itcouldevenbeaboat The vast majority of (useful) credit cards don't have annual fees. The exception tends to be airline cards, but those usually give you perks that basically pay for the fees (such as a number of points with the airline equal to the annual fee.) – reirab Mar 5 '15 at 22:09

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