7 Things to Know Before Getting a Second Credit Card
Credit Cards are highly popular financial products that led to coining of the term “Plastic Money.” They have radically reduced the need to carry hard cash and enabled the holder to make purchases even they did not have any money in their pocket. Credit Cards are a form of instant loan for which you need not apply,again and again; you just need to swipe the card at a POS terminal or enter the details on the online payment gateway to avail the facility. With the rising popularity of online platforms as well as easy availability of POS terminals, usage of Credit Cards for making payments has become more prevalent. In addition to it, rewards, cashback,and discounts offered by various companies and websites on payment through Credit Cards have contributed significantly to their rising popularity.
Such is the popularity of Credit Cards that most of us have at least one card, which we are more than happy to flash at the time of payment. But are you aware that managing cards efficiently is no mean task? It requires strict financial discipline and attention to details, to ensure that you are not piled under a massiveCredit Card debt. If not handled carefully, this debt can severely impact your credit score and affect your eligibility for availing loans in future.
1. Where to Apply for a Credit Card
With rapid integration of technology in the financial services sector, it has become very convenient to Find The Best Credit Card using the internet. You can browse through a vast array of cards offered by various banks,and once you have identified the most suitable one for yourself, you can fill the online application and receive the card at your place in a few working days. You can also choose to apply for a Credit Card by visiting the nearest branch of the bank and filling the application form in person.
2. Things to Know Before You Get a Second Credit Card
If you have been maintaining your Credit Card account regularly,i.e., making purchases regularly and making payments on time, then you would be receiving calls and emails from various other Credit Card providers. They would be offering you a host of benefits on applying for a new Credit Card and lowest interest rates as well. But before you think about getting a second Credit Card, here are a few essential things that you must know:
3. Impact on Credit Score
If you are getting a new Credit Card in addition to the one you already have, you must remember that it would also affect your Credit Card utilisation ratio which has a direct impact on your credit score. You can keep as many Credit Cards as you like but you need to make sure that the combined usage of all the cards never exceeds 30% of their combined limit. If you think you cannot manage to keep your card usage within the desired threshold, then you should think twice before filling out the application for a new Credit Card. Having too many cards will have an adverse effect on your credit score and can impact your ability to get any loan in future.
4. Interest Expenses
Always make it a point to check the applicable interest rate on the new Credit Card. Sometimes these cards are offered at a promotional interest rate, which is significantly lower than the prevailing rates in the market. This promotional interest rate is only valid for initial few months,and thereafter you need to pay the higher interest rates. So, carefully consider the interest expenses that you will have to bear every month in the long run and assess if your financials allow you to take care of such expenses.
5. Paying Bills on Time
You will need to make sure that you make the payment for two cards on the due date and must try to make payment for the entire amount due on both of them. If you do not make payment on time, there are very high late payment fees and penalties that are charged by the bank. So, if you think you cannot manage more cards, you can consider applying for enhancement of total limit in your present card as well.
6. Interest-Free Period
Every Credit Card has an interest free period ranging up to 60 days,i.e., if you pay the entire amount due within this period your entire interest cost is waived off otherwise you will need to pay interest right from the day of purchase itself. So, select such a Credit Card that offers you maximum interest-free days as it would help in saving a lot on the interest cost.
7. Rewards and Benefits
When you are thinking about applying for a second Credit Card, you need to see what kind of benefits, cashback, and rewards are offered by it. There are different rewards offered by different Credit Cards on specific purchases. So, you must understand what your spending patterns are and then find the best Credit Card that offers cashback and rewards on such purchases. This can help you save a lot of money in the long run. Getting a second Credit Card is a crucial decision that can have a significant impact on your creditworthiness and you must understand all the implications before you commit yourself to a new credit card.
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