6 Reasons You Should Always Have More Than One Credit Card
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Written by
Andrew Lisa
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Edited by
Levi Leidy
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Reviewed by
Jasmin Baron
Each credit card has its own rewards structure, a fact that savvy cardholders who manage their credit wisely can use to their advantage by opening multiple accounts. Having more than one card can compound cash-back earnings and amplify other perks while maximizing financial flexibility and improving credit health.
Although multi-card strategies are not without risk, disciplined and diligent borrowers might benefit in the following ways.
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To Maximize Bonus Rewards
Learning to manage multiple cards is the key to maximizing rewards.
For example, at least one card gives an industry-leading 6% cash back on groceries and streaming, which alone is enough for many households to justify paying an annual fee. A smart cardholder might pair that card with another that pays bonus cash back for travel, and perhaps a third that pays magnified points for dining and entertainment.
This strategy can deliver elevated rewards in nearly all major spending categories with just two or three strategically chosen cards.
To Capitalize on Both Bonus-Point Value and Flat-Rate Simplicity
Multiple issuers offer nearly identical flat-rate cards that pay unlimited 2% back on all purchases with no annual fee, making them excellent everyday spending cards. If you can have only one card, a no-fuss flat-rate card with no categories to activate or shifting rewards to keep track of might be a sensible choice.
However, combining a flat-rate card with one that pays bonus points for specific spending categories can provide a backstop that doubles the typical 1% default rate for all other purchases.
To Leverage Different Rotating Category Structures
Some bonus cards have fixed reward structures that remain the same throughout the year for all purchases. However, many others rotate their bonus-spending categories, typically quarterly, e.g., gas from January through March, dining from April through June, etc. This allows cardholders to maximize their rewards by combining multiple rotating category cards to earn the highest rewards throughout the year.
Some cards let you pick the bonus categories. Others automatically apply the top rate to your highest eligible spending category each billing cycle. Either way, utilizing multiple cards to maximize the benefits of different rotating rewards structures provides even greater control and enhanced benefits.
To Get the Most From a Favorite Brand, Store or Platform
Loyalists who concentrate much of their spending in one place can maximize their rewards with a branded card. However, store/brand/platform-specific cards are notorious for having little or no value beyond their walls or website — and that’s where multi-card strategies come into play.
For example, a card for an e-commerce platform might pay unlimited 5% cash back for qualifying on-site and affiliate purchases. A cardholder who combines those benefits with complementary perks from a rotating category card — or even a flat-rate card for all other purchases — can boost their rewards and get paid more to spend across a wider variety of categories.
As a Makeshift Emergency Fund
Most credible experts recommend maintaining an FDIC-insured savings account with at least three months’ worth of living expenses for emergency use. Many suggest no less than six or even 12 months’ worth. However, millions of Americans simply can’t do that, at least not quickly.
While you work to build a sufficient cash cushion in savings, having a dedicated credit card, particularly one with a low- or no-interest introductory period for purchases, is certainly better than nothing — especially if toxic debt like payday loans is the only other option.
To Improve Your Credit
Each new credit card expands your open credit and reduces your credit utilization ratio, a key component of your credit health that accounts for 30% of your FICO score, more than any factor except payment history.
However, it’s crucial not to bite off more than you can chew. Multiple cards can improve your credit profile and rewards earning, but only when used responsibly. Each new card also adds risk, reduces the margin for error and provides increased opportunities to overspend and over-borrow. Keeping tabs on constantly rotating categories, different reward structures, periodic enrollment requirements and multiple monthly due dates can overwhelm and eventually trap some cardholders in debt.
For those who can manage them, however, multi-card strategies can be a real financial boon, padding your account with rewards and making your credit score better.
