This isn’t a one-size-fits-all question, but hopefully these pros and cons will help you come to a sensible conclusion that’s right for you.
It’s probably not what you want to hear, but there’s no right or wrong answer to whether or not you need two credit cards. As with almost everything in life, there are both pros and cons to doubling your plastic, but you’ll be pleased to hear that we’re about to take a good look at both.
If it’s because you’ve maxed out your current one and you’re trying to get your hands on more cash, odds are, you probably shouldn’t take out a second credit card. Having access to too much credit can be a dangerous spiral to start on, and the last thing you want is to find yourself in uncontrollable debt.
You should only ever consider taking out a second credit card if you’re on top of the monthly repayments for your existing one, you’re confident you’ll be able to stick to the installments on your second one, and you know you won’t go overboard with the credit limit available to you.
If you’ve read this far and you still think a second credit card is a sensible option for you, then let’s take a look at some of the pros and cons.
Two credit cards: the advantages
One of the beauties of credit cards are that they aren’t bound by a single type. By this, we mean that different cards have different functions. For example, there’s the ‘standard’ credit card that most lenders offer, and then there are 0% purchase credit cards – with the latter, you won’t be charged interest on your monthly payments for a set period of time (but not forever).
So let’s take a look at when having two credit cards might actually make sense...
You have a standard credit card that you use solely to top up your petrol to keep your spending habits ticking over, and it has a 15% APR attached to it. You decide to renovate your bathroom and it’s going to cost you £900 in total - but you don’t have that kind of cash lying around.
Putting the cost of your bathroom makeover on your 0% credit card would allow you to get the work done without waiting to save, and it lets you repay what you owe without being charged a single penny – providing you pay it before the interest-free period expires, of course.
Make the most of deals
Different credit cards come with different deals. So, by taking out two, you could maximize on various different rewards or loyalty points – you’d just need to split the spending across both cards.
In Layman’s terms, credit utilisation is how much of the credit you use versus how much is available to you.
If you max out both your credit cards this will have the opposite effect and could, in fact, harm your credit history. But, if you have two credit cards and only borrow small amounts, you could show yourself as a responsible borrower – which is exactly what lenders like to see.
Two credit cards: the disadvantages
More credit cards means more money at your dispense, which means some serious self-discipline is needed. If you were to go off the rails and reach their limits, you could find yourself in a financially tricky spot.
If you’re absolutely, 100% confident you could afford the repayments for both of these then this might not be a concern, but it’s extra important to only spend what you know you can afford on each.
Harder to manage
Two credit cards mean two monthly instalment dates. Two credit card statements. Two sets of interest rates. Twice as much to keep up with.
It might not seem like much, but mixed up with the mayhem that is everyday life, it can soon become difficult to stay on top of, and missing a payment is something you absolutely don’t want to risk happening.
Hinder your credit score
As we touched on earlier, if you don’t use both your credit cards sensibly, you could harm your credit history. This is because future lenders can see how much credit you already have available to you, and if you’re not managing those lines of credit well, it can set off alarm bells in their head.
Credit card applications show up on your credit history. So, if you apply for a second credit card in quick succession after taking out your first, future lenders will be able to see.
To them, at a glance, this can make you look desperate to access cash, which may make it more difficult to be accepted for other types of credit – like a loan of mortgage – down the line. To overcome this as best you can, if you do want to apply for a second credit card, you should leave a couple of months between applications.
We hope these pros and cons have helped to answer your question of whether or not you need two credit cards. For more credit card-related insights, head over to our dedicated section on them here.
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Intelligent Lending Ltd (Credit Broker). Capital One is the exclusive lender.