Not many years ago, before the economic crisis in Spain, it was very common to have several cards, especially credit cards. This practice, in addition to other factors, led many citizens of the country to a situation of over-indebtedness, which is still in force today. Credit cards allow us to use money that we do not have and many people have several to get the most out of each one of them. However, if we use more than one card we must be aware of the risk involved in using them irresponsibly and the advantages that we can benefit from if we know how to manage them.
The key to having several cards is knowing how to choose them
If we want to have more than one card, it is essential that we know which one to choose, the purpose that we are going to give it, and know what conditions they have. Depending on our preferences, we will choose one or the other, but if we want to avoid paying for them, we should look for free cards.
Generally, most debit cards are usually free, but credit cards may have costs such as issuance and maintenance fees. For this reason, if we want to have more than one card, we must make sure that we do not have to pay anything for them. To verify this, we must inform ourselves about the conditions that we have to meet when hiring them.
In these cases, having several credit cards will not imply any cost and, in addition, with all of them, we will obtain different bonuses, offers, discounts, and free insurance that we can take advantage of at zero cost. In addition, to get some of them we don’t need to change banks.
Why is it advisable to have different types of cards?
As we have already mentioned, the main thing is that we make sure that the cards we have do not include any cost. But, in addition, having a credit card and a debit card can be useful if we know how to use them.
For example, having a credit card can be very useful to have immediate liquidity, even if we do not have it, and to solve unforeseen events. In these cases, we should reimburse the money by paying it in full, since we will not be charged interest.
On the other hand, the debit card is very suitable for making use of our money without the need to carry cash and have constant control of our economy and in this way, we will avoid becoming over-indebted.
Since there is no perfect formula, the ideal number will depend in each case on spending behavior, financial goals and how responsibly the budget is managed each month. For this, it is advisable to take into account the following considerations:
- Level of indebtedness or payment capacity. If it is determined that approximately 30% of the gross income is destined to the payment of credit, then it is considered that they already have enough debts. Now, if you can only cover the minimum payments, you may have ‘too many’ cards and/or debt. On the other hand, if the economic situation is more comfortable and you have only one credit card, having an additional one could serve as a backup for unforeseen purchases and expenses.
- The use of the line of credit or available. For example, if the credit card has a limit of 500,000 and currently the debt is 200,000, then 40% of the available credit is being used and that is positive. Now, if it constantly stays on top, you’re overusing it; and below 10% the card would be underused. When credit is properly managed and also paid on time, the credit history is improved.
- Payment management and control . Credit cards must be tracked, this includes timely compliance with payment dates, trying to pay a little more than the minimum, knowing the current interest rates, as well as keeping track of credit limits based on the consumption and purchases that have been made. Thanks to online banking, this management has been greatly simplified, even facilitating the minimum scheduled payment.