Credit cards are a very convenient form of credit that helps you pay for things quickly. When an issuer gives you that credit card with your name on it, you’ll be able to use it to pay for almost anything straight away. Utility bills, new stuff at the mall, online shopping, dining, and so much more can be yours with just a swipe or a wave of your card. As long as you’re spending within your limits and paying your bills responsibly, this tool can simplify many parts of your life.
A credit card is a potent tool, and unknown to many, you’re allowed to have more than just one! According to guidelines by Bank Negara Malaysia, anyone with an annual income of RM36,000 or less can hold credit cards from two issuers. On top of that, the credit limit on each card can be as high as two (2) times your monthly salary. With two cards from two issuers, your credit limit could be as high as four (4) times your monthly income! That’s a lot of credit that can help you improve your quality of life and help you survive through emergencies. However, it can also mean a lot of trouble if you misuse it. Remember: your goal isn’t to dry up all that credit and get yourself into a lot of debt! If you’re able to use credit responsibly, it might be a smart idea to have access to more than one credit card.
1.They Help You Build Financial Discipline
With great power comes great responsibility, and this is especially true when it comes to credit cards. Having those cards in your wallet can make it feel like the entire world has opened up to you! Plus, a high credit limit makes it feel like nothing is stopping you from indulging in anything you want, even if you can’t afford it. However, with credit cards, it’s crucial to make sure that you pay back what you owe and do it on time. To avoid falling into massive debt, you must first have the discipline only to use those cards when it is necessary. Getting used to monitoring and paying your credit card charges will teach you to use them more carefully, instead of treating them like toys.
2. They Give You Access to Different Benefits and Rewards
Credit card issuers are very competitive when trying to get your business. Remember: they profit whenever you use their credit. Therefore, it’s in their best interest to get you to swipe and wave your credit cards by tempting you with benefits and rewards. These benefits and rewards may include shopping, buying petrol, travel, dining, loyalty points, and any combination of all those things. Rewards and benefits are great when spending on things that you were going to pay for one way or the other (like utility bills). However, be careful not to use them as an excuse to justify unnecessary spending!
While some cards offer a broad spectrum of rewards, others tend to focus more on just a few categories. For instance, some provide more substantial discounts or points when you use them at particular petrol stations. Cards targeting travelers may offer lounge access and extra air miles for specific airlines. You can make the most of this by having two cards, each with more benefits in one category. For example, you may have one card that gives out lots of petrol-related benefits; using that card to fill up your car weekly. Meanwhile, your second card may be one that gives you good deals at major supermarkets, which will come in handy for when you buy groceries.
By playing it smart and taking advantage of these benefits, you’ll be squeezing more out of each ringgit you spend. The significant difference here is, making those payments with a credit card gives you benefits that you wouldn’t get by paying cash.
3. They Give You More Flexibility During Emergencies
One scenario where we may find ourselves needing a lot of credit is when it comes to emergencies. These could be in any form from medical emergencies to our car suddenly needing urgent repairs. In these moments, we won’t have time to apply for personal loans or to borrow money from people, but we can easily rely on our credit cards.
With multiple cards, you’ll have the option to spread out your payments. This flexibility is excellent, especially if one card doesn’t have enough available credit to pay for anything. For this to be effective, you always have to make sure that you keep a big part of that credit unused. Doing so will give you peace of mind that you can rely on that credit whenever you genuinely need it.
4. They Act as Backups
Somewhat related to the last point was that an additional credit card could serve as a crucial backup. Imagine if you got caught in an emergency and tried to use your credit card. When you swipe or wave your card, you’ll still have to wait for the bank to approve that transaction. That wait, which feels like an eternity during an emergency, may end with the bank declining the transaction!
Now, imagine if this situation was happening while you were traveling overseas, a thousand miles from home! What would you do in such a case? If you find yourself in a position like this, your cards could be the lifesaver that you rely on to get you through that situation, and back home as soon as possible.
5. Having Them Helps Your Credit Score
Even if you didn’t need a lot of credit, just having multiple credit cards could benefit you by helping to improve your credit score.
See, your credit score is affected by a few different factors. One of them is called your debt utilization. When it comes to your credit cards, debt utilization refers to how much of your credit limit you’ve used up. Having a high credit limit and only using it when necessary shows banks and lenders that you can manage credit responsibly. Having this reflected through your credit score will come in handy one day when you need to apply for other forms of credit like a mortgage or a car loan.
The benefits of having more than one credit card are clear. But before you decide which credit cards to get for yourself, you must always do your research. Instead of comparing credit cards one at a time or relying on others for advice, use CTOS Credit Finder to filter out and compare credit cards with precisely the rewards and benefits that’ll make your life much more convenient!