4 Tips on How to Successfully Manage Multiple Credit Cards
Credit cards are powerful financial tools that are often designed to suit specific needs. When you end up with more than one credit card, it usually boils down to choosing a particular product to suit a distinct requirement.
If you have several credit cards, keeping the following tips in mind will help you make the most of each account.
1. Determine how much you can spend on each card
Develop a budget which will help you figure out how much money you can pay on each card without running up a balance that you might find a bit difficult pay off. Each card should address your specific requirement. Some cards may have higher rewards for certain types of purchases or certain retailers.
You will get more value out of each card if it serves a specific purpose.
2. Pay on time
Multiple cards mean multiple bills each month. The more cards you hold, the easier it is to lose a bill or forget to send a payment on time. Paying off balances on multiple cards can be done to have maximum effect. You can pay off the card with the highest interest rate first and save you money in interest. Alternatively, you can pay off the card with the lowest balance first and close out an account. On the whole, you should avoid carrying a balance. An automatic, online bill-pay system can be ideal for this purpose. You can usually request to pay the full amount, a minimum amount or a nominated amount off your accounts each month. This allows you to keep each card in good standing.
3. Keep track of your cards' terms and limits
Costs like annual fees, interest charges etc., for each card, make owning multiple credit cards an expensive affair. Regularly review your credit card costs to decide whether the benefits outweigh the costs for each card. If you can’t justify the expenses of one or more of your cards, consider cancelling them and sticking with the ones that work best for you. It is also useful to note how each card's rewards program works. Knowing your rewards balance, when they expire etc., will help you get the most out of each card.
4. Check your credit card activity frequently
Check your credit card accounts regularly and call your provider if anything looks suspicious, like purchases that neither you nor an authorized user made. The more cards you have, the more opportunities there are for fraudsters to steal your credit card information. Keeping track of your credit card activity, helps you avoid this situation.
Using multiple credit cards can be an effective way to rack up rewards points and earn free travel, cash back and other perks. Managing multiple credit cards may seem like a daunting task, but it doesn't have to be if you're careful about how you use them. Setting up a budget, understanding your cards' terms and limits and finding a payment strategy that works for you can help you get the most out of your cards.
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