Here’s why you should have more than one credit card

Credit cards are a form of revolving credit that you can use to make everyday purchases. According to national credit bureau Experian, 61 percent of Americans have a credit card, and each borrower has an average of four cards.  

While having more than one card may not seem necessary, there are many potential benefits to having multiple credit cards. Depending on your finances, goals and general preferences, here are some reasons to consider it.

Credit card rewards

Not all accounts offer rewards, but many do in the form of cash back, points or miles. But depending on your spending habits, one credit card may not offer a high rewards rate on your biggest spending categories. 

As a result, using two or more cards in tandem could make it easier to get the most bang for your buck. 

For example, if you spend a lot on groceries, you could get one card that offers a high rewards rate at grocery stores. But if you also spend a lot on fuel, getting another card with a high rewards rate at gas stations could help you earn more. 

Increased credit limit

The bank or credit union issuing your card will use a variety if factor to determine you credit limit including your credit history, income, and other debts. If you have one card with a low credit limit, bumping up against your limit every month could hurt your credit.

But if you get a second or third card, you could spread your purchases across each card to maintain lower balances. Having multiple cards could also potentially help you in a financial emergency. 

Improved credit score

Having more credit cards can help improve your credit score because it shows that you can manage multiple credit accounts at once. As long as you pay your bills on time every month—preferably in full to avoid interest charges—you’ll see some benefits to your credit score.

Backup payment method

Having your card declined is rare. But if it does happen, having a backup card can help get you out of a tight spot. 

This is especially true if you’re traveling. Whether you’re still in the U.S. or you’ve taken a trip abroad, having a credit card declined at a hotel, a gas station or somewhere else could leave you stranded. But if you have more than one card with you, you’ll have a better chance of finishing the transaction. 

**article originally written by Ben Luthi