Should I Have More than One Credit Card?

I used to think it odd when people would have 3 or more credit cards, especially the generous credit limits provided for these days.

For example, consider having 4 cards, each with a $6,000 credit limit.  That’s a $24,000 line of credit you could borrow in no time.  A 1 month luxury trip to Hawaii could rack up those types of charges.

But, then you’re faced paying down $24,000 in debt with high interest rate attached.

As far as I was concerned, one card with a $6,000 credit limit was and is sufficient for me.

Not having a second credit card could be embarrassing

Imagine taking your folks or friends out for dinner.  You make it clear you’re paying.  At the end of the meal your card is declined.  You look like a financially irresponsible person.  It’s not a good scene.  If you have an extra credit card, sure, it doesn’t look good, but at least you can pay the meal with your second card.

My recent credit card fraud protection incident made it clear to me that there sometimes credit cards are denied for reasons other than not making payments or spending the full credit limit.

I don’t use cash much; instead I rely on credit cards.  If a card is declined for whatever reason, having a second or third card is handy and can get you out of a jam.

3 reasons to have more than 1 credit card

  1. It’s handy to have in case the other card is declined for whatever reason (fraud, limit reached, technical difficulties).
  2. You get a second card for a strategic purpose.  One strategic purpose is stopping interest accrual if you have a hefty balance.  The way you can stop interest accrual for a set amount of time (usually up to 12 or 15 months) is getting a 0 balance transfer credit card.  I’ve done this for strategic purposes more than once in my adult life and it worked great (I’m a huge believer in 0 balance transfer credit cards).
  3. You find a credit card with outstanding rewards such as frequent flyer rewards, hotel rewards, gas rewards (gas rewards are good given the high price of gas these days).

1 reason not to get a second or subsequent credit card

To get more credit because your existing credit card limit is maxed out.

If you have one credit card that isn’t maxed out and is used responsibly, then consider getting a second card because you never know when your sole card may be declined for any reason.

Filed Under: Credit Cards Tagged With:

Does Credit Card Fraud Protection Work? What Happened to Me

About 2 months ago, on a Friday, I was driving home from work.  It was beautiful out.  A perfect Friday afternoon.

I pulled into the gas station I use each week to fill up.  Fill up, check my oil, go into the store to pay.

The cashier tells me my credit card isn’t working.  That’s strange.  I know I paid the bill last month.  Anyway, I don’t like to make a big deal about it; I hand over another card.  It works and I’m on my way home to enjoy pizza and a movie on Friday night.

Within 2 minutes of leaving the gas station, my cell phone rings.  I answer it and it’s the credit card company calling me about some unusual activity.  I told him that my card was declined minutes.  He tells me that they suspected fraud on my card.  I said I was just trying to buy some gas.

He apologizes (excellent customer service), but asks whether I was trying to spend $810 at Walmart in North Carolina (I don’t live anywhere near North Carolina).  I said “No, I’m not anywhere near North Carolina.”

He tells me they flagged the North Carolina purchase as fraud and that’s why my card isn’t working.  He also said that my card should be cancelled and a new one issued.  I readily agreed.

I was impressed.

I’m a trusting sort of guy and when credit card companies tell me they offer fraud protection, I don’t really think about it … but when they actually pull through, I was really impressed and grateful.

I tend not to think or worry much (at all actually) about being a victim of credit card fraud.  I buy plenty of stuff online without any thought to credit card fraud happening to me.

Anyway, in my limited credit card fraud experience, credit card fraud protection worked.  I’m not saying you’ll have the same successful outcome I did; however, as far as I’m concerned it works.

In fact, my wife, even more recently had a fraud scenario happen to her as well.  The credit card caught the fraud, shut down the card, notified her, and is issuing a new card.  That’s 2 for 2 which is fantastic.

Filed Under: Credit Cards Tagged With:

10 Reasons to Get a Credit Card

I remember getting my first credit card.  I was pretty excited about it.  I got it after college.  Fortunately, I didn’t go crazy and rack up charges.  I used it as I use credit cards now … as a tool of convenience.

10 Reasons to get a credit card are

1.  Convenient for purchasing products and services

This is probably the number 1 reason to get a credit card.  These days you can buy pretty much everything with a credit card.

I find using a credit card much more convenient than using cash.  Credit cards make it easy to track my monthly expenses, plus I enjoy various credit card rewards.

2.  Build credit

Once upon a time I applied for a credit card and was denied because I had no credit.  Of course I couldn’t help but think “how am I supposed to get credit if you won’t give me a credit card?”  Anyway, eventually I obtained a credit card and was on my way to building a great credit score.

Now, fortunately, there are credit cards for people with no credit.

3.  Fix bad credit

If you have bad credit, one way to fix it is to get a credit card for people with bad credit.  Then, be sure to pay off the balance each month.  In time, using the credit card each month plus paying it off will help fix your credit.

4.  Credit cards as an operating line of credit

I use my credit card for my household as an operating line of credit.  It makes household expenses month-to-month easy and convenient.

5.  Rent stuff

Often you need a credit card to rent or lease stuff such as a car.  Without a credit card, renting vehicles and equipment is almost impossible.

6.  Recurring purchases

There are some purchases that require a credit card, or make your purchase convenient, and that is recurring purchases such as gym memberships.

7.  Rewards

Credit card companies offer all kinds of rewards credit cards.  One of my favorite types of rewards credit cards are cash rebate cards.  However, you can get credit cards with all kinds of rewards such as hotel rewards, frequent flyer cards, gasoline rewards cards, etc.

8.  Track monthly expenses

I like tracking my monthly expenses easily with my credit card statements.  I only use 3 cards and so it’s easy to view 99 percent of my monthly expenses on 3 statements.  It’s great for budgeting purposes.  I can also see quickly where I’m wasting money or spending too much money (those dinners out add up quickly).

9.  Online shopping

It’s difficult buying goods and services online without a credit card.  Yes, there’s Paypal, but not every vendor or online store offers Paypal as a purchasing option (many do though).

10.  Defer mounting interest charges

What on earth am I talking about here?  How can one defer mounting interest charges by getting a credit card?  Actually, it’s easy with 0 balance transfer credit cards.

That all said, getting a credit card is not worth all the benefits if you get yourself into debt trouble.  Please use any credit card you get responsibly.

Filed Under: Credit Cards
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