Copyright timesnownews
In India, an increasing number of consumers are relying on credit cards to manage both their everyday spending and festive season splurges. With attractive reward programs, cashback offers, and easy EMI options, credit cards have become a convenient tool for financing lifestyle expenses. A recent report by Paisabazaar revealed that over 42 per cent of cardholders spent more than Rs 50,000 during the festive season using credit cards, a clear sign of the growing dependence on plastic money. However, this easy access to credit can also tempt individuals to apply for additional cards in pursuit of higher credit limits or better offers. Before taking that step, it’s crucial to understand how holding multiple credit cards can impact your financial health, especially your credit score. Managing several cards requires careful planning and discipline to avoid debt traps and ensure timely payments, both of which play a major role in maintaining a strong credit profile. How Having Multiple Credit Cards Can Work In Your Favour When used thoughtfully, multiple credit cards can be a valuable financial tool. One of the biggest benefits is that they can lower your credit utilisation ratio. A higher total credit limit, combined with modest spending, helps improve this ratio, something that directly contributes to a stronger credit score. Another advantage is a diverse credit mix. Using separate cards for different categories, like travel, shopping, or fuel, reflects responsible credit behaviour and shows lenders that you can manage varied financial obligations effectively. Consistent and on-time repayments across all cards, loans, and mortgages also send a positive signal to banks. They highlight reliability and creditworthiness, which can improve your standing with financial institutions. The Hidden Risks Of Owning Too Many Credit Cards However, more cards mean more responsibility. A single missed or late payment can cause a significant drop in your credit score. Applying for several cards within a short timeframe also reduces your average credit age and triggers hard credit checks, both of which can negatively impact your profile. Additionally, using a large portion of your available credit across multiple cards may indicate overdependence on borrowed money, making it harder to secure loans later. Even closing older cards to save fees can shorten your credit history and reduce your overall available credit limit. Smart Strategies To Manage Multiple Credit Cards To get the best out of multiple credit cards, keep your credit utilisation below 30 per cent, never miss a payment, and review your credit report regularly for discrepancies. Space out new credit applications, and keep older cards active unless maintenance fees are too high. Setting up automatic payments is also a simple but powerful way to avoid missed deadlines. Ultimately, having several credit cards can either strengthen or weaken your financial standing; it all comes down to how responsibly they are managed. Before applying for new credit, it’s wise to consider potential risks such as debt build-up, high interest rates, and possible fraud. Consulting a certified financial advisor can help you make well-informed decisions and maintain a healthy credit profile. (Disclaimer: This article is meant solely for informational and educational purposes. The views and opinions expressed are those of individual analysts or brokerage firms and do not reflect the stance of Times Now. Readers are advised to consult certified financial experts before making any investment decisions.)
