- 1 pros and cons of having multiple credit cards
- 2 How Many Credit Cards Should You Have to Maintain Good Credit Scores?
- 3 Compare Top Credit Card Offers
- 4 Why I Don’t Have a Business Credit Card (And How it Grew My Income Dramatically)
- 5 Lucky Bitch Video Transcript – Why I Don’t Have a Business Credit Card (And How it Grew My Income Dramatically)
- 5.1 There are a couple of reasons why.
- 5.2 Are there downsides to not having a credit card? Sure.
- 5.3 That’s my final message. As always, I just wish you love, luck and abundance in your life and business.
- 6 Can You Have Two of the Exact Same Rewards Credit Cards?
pros and cons of having multiple credit cards
On one hand, having more than one credit card provides more rewards, while on the other, they may become a financial burden for you. Read about the many pros and cons of having multiple credit cards.
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How Many Credit Cards Should You Have to Maintain Good Credit Scores?
If you can afford to have more than one credit card, it can benefit your credit. Bankrate says that contrary to popular belief, lenders do not assume that people with multiple lines of credit are more likely to have debt. Having older, established cards on your account that you pay off frequently will benefit your score.
Applying for multiple cards in a short amount of time will affect your credit report negatively. Opening multiple accounts at once will make it seem like you are in financial trouble and need credit immediately. MSN Money expert Liz Pulliam Weston recommends starting with one credit card and applying for others later.
Any number of credit cards, if kept in good standing, can positively affect your credit score. Only carry the number of cards that you can afford to pay off. Bank of America recommends paying your balance on time each month and never carrying a balance of more than 50 percent of the card’s limit to keep your credit in great shape.
Compare Top Credit Card Offers
This calculator will help you make a decision between two credit card offers. First enter a sample balance amount for the comparison and a monthly payment that is greater than the monthly interest charge.
From there, fill in the fields where necessary. Under both the columns for Card #1 and Card #2, input the following information: annual fee, introductory annual interest rate, the term of that introductory rate, and the regular interest rate. Then from the pull-down menus provided, choose either “daily” or “monthly” as the compounding periods. Press CALCULATE, and you’ll learn the number of payments it will take to pay off the balance on both cards, and you’ll see the total costs associated with the balance on the two cards. Hopefully, this can lead you to the best card for your wallet.
If a card has no introductory offer, leave the introductory fields blank for that card (rather than entering a zero in both fields).
It seems every week there's a new, shiny credit card offer in the mail. From free airline miles, to cash back, to credit towards vacation and free gas, how do you tell the difference between a great value and a scam? While there is no blanket perfect card for everyone, there is the perfect card that best suits your needs. There are three components that go into making a good decision on your next credit card. The details of the credit program, the rewards, and your spending habits create the ideal card for you.
Since you can't select "cafeteria style" what best suits your needs based on credit, rewards, and spending habits, you must look at the offerings in each group and choose the best all-around based on your needs. The first step in selection is thinking about spending habits.
Analyzing your spending habits is essential to finding the right card for you. It's important that you are honest about those habits and not base your assessment on the person you'd like to be, or intend to be, going forward. A good assessment includes asking yourself:
- How much do I charge every month?
- Do I carry a balance? All the time or just occasionally and then it's paid off?
- What types of charges do I make most?
- How often do I charge?
- What's my credit score?
- Do I have multiple credit cards?
- How often do I travel?
- Am I brand loyal?
Drawing a realistic picture of your spending habits will help you pick out a card that best suits your needs. The amount you charge every month is important. Some credit card companies offer amazing perks to high spending customers. If you fall into that group, you could be rewarded for your expenditures, but if not, you might pay a higher yearly fee.
Some cards also offer rewards if you spend a certain dollar amount within the first six months of the account being open. If you don't intend to spend that amount, the card may not be worth it.
For credit card customers who consistently carry a balance, it's better to look for low-interest rates than miles or other perks. The discounts you receive from the card won't prove worth the extra dollars you spend on the interest and fees for carrying a balance.
Know the types of charges you make most
Knowing the types of charges you make most often is important when looking at the different benefits of the cards. Most rewards cards offer benefits on the dollars spent in a particular category. For instance, a card may give you two percent cash back on all gas and grocery expenses and one percent on all restaurants. If you never charge groceries or gas, this is obviously not the right card for you. Pair up your spending with card benefits for maximum reward.
Credit card companies advertise a lot of deals as an incentive to draw in new customers. However, many of the rates you see and the best offers require a minimum credit score. If you don't qualify for that score, your interest rates will be higher.
Also, must credit card companies reserve the right to increase your interest rate should you miss a payment or should your credit score plummet, even if you keep making your payment to them on time. Many of the companies tightened up their policies and penalties during the recession.
If you have multiple cards, you're probably dividing your spending among them, which means you may not be eligible for the spending minimums that will give you the best benefits.
While this is sometimes a good idea -- like when you place your gas spending on the card that gives you the most benefit for doing so, and your travel expenses on the card that rewards those at the highest level -- it takes a good memory to manage which card offers the best deal on which type of expense.
If you don't travel often, or don't spend your time at a particular type of hotel or on a single airline, travel cards will not benefit you. Be honest about the type of traveling you do, how you get there, and where you stay. Being brand loyal pays from a rewards standpoint but if you're a bargain traveler, going with the best deal, not the same brand, a loyalty card won't be your best bet.
Now that you know a little more about your spending habits, it's important to discuss the particulars of cards and what makes them different.
Read the fine print on your card offer to find out if the card you're considering has an annual fee. If it does, and many of the high paying benefit cards do, do a quick calculation of how much you would need to see as a return for it to be worth it. Some cards will waive the fee for the first year so if you're unsure of whether the fee will cover the benefit, you can try it for a year and cancel if it doesn't.
Many credit card companies have cards with and without fees, so if you find a company you want to do business with but don't want to pay an annual fee, ask a member of their customer service team what options they can offer.
All credit card companies are going to charge you something for not paying off what you owe each month. The only exception to this is balance transfers and introductory rates. Read the fine print of the offer to find out:
- what the interest (APR) rate is
- how long the interest rate is in effect
- if the balance transfer rate is the same as the interest rate and for how long
As mentioned above, credit card companies will raise your rates if the minimum due is not paid each month. A good deal on an APR or introductory rate can be negated instantly with one late bill. Make sure you know the company's policy on late payments and its effect on rate increases before applying for the card.
In addition to the rate, it's important to understand how the company calculates the interest charged on late payments since it can make a significant difference. You will pay less if you select a company that bases the balance computation method on an average daily balance and not on the balance of two billing cycles.
Sign-up bonuses are wonderful if you can meet whatever spending level required and the card (after the bonus) fits your spending habits.
While hidden fees aren't entirely hidden -- they're always in the small print -- many credit card customers don't take the time to read them. If you're considering a new card, acquaint yourself with these charges if you want to avoid overpaying.
Understanding credit limits and utilization rates
When you've been approved for a card, you'll be given a credit limit. This is an amount of credit the company is willing to extend you. Many credit card companies will continue to raise the limits for card owners with good credit who pay on time. This is a benefit that can help your credit score, as long as you're not using a large percentage of the increase.
Credit score companies factor in your utilization rate, which is the percentage of your open credit in use. They do this for each card as well as the total for all of your cards. The ideal utilization rate is 20 percent (or lower). For instance, if you had a $3,000 limit on your card, keeping your balance at (or under) $600 would help increase your credit score. It shows lenders you have been extended to a higher line of credit but show the restraint not to use it.
Chip cards and what they mean for fraud
Identity theft and credit card fraud are major concerns for credit card holders and the companies that extend them the credit. Many companies are starting to embed chips in their cards to fight identity theft and fraud. The U.K. is already using chip and PIN cards, but the U.S. has been slow to adopt them. The new cards are not compatible with current card readers.
The new cards employ pins instead of signatures, so even if someone stole the number of the card, she would need the pin to complete the transaction. The cost to switch to a new system so far is prohibitive, but this is something that might show on the horizon for the United States. You should consider this in choosing a card if you travel a great deal in Europe, as some U.S. cards will no longer work there.
Not all rewards programs are created equally. Your spending habits should influence your choice in reward cards. There are many options out there including:
Travel rewards cards are cards that offer direct seats on a particular airline. These cards are ideal for brand loyal, frequent travelers with frequent flyer accounts.
Key point of these cards is that they not only lock you into traveling on a specific airline, but they also employ blackout dates (times in which you cannot travel) and offer only a limited number of seats. You must book early if you're using miles.
Another problem consumers have met recently is the number of changes companies offering frequent flyer programs have instituted. Companies like United and Southwest are now basing rewards on ticket cost, not on distance. If you get a great deal on a ticket, you'll earn less as a frequent flyer. Keep this in mind when you are considering a travel reward card.
Some travel cards pay rewards as credits against travel. This means you pay for your ticket first and get credited on your bill, a nice perk that helps avoid blackout dates and provides more flexibility.
There are a number of cash back reward cards that give you a portion of your spending back. Look for cards with high total percentages or high rewards in the area you spend most. A few of these cards don't give direct cash rewards back but rather add them to an investment vehicle for you. Understand how the reward is paid before choosing one.
Gas rewards and company-specific cards
These reward cards are similar to the cash back but offer rewards with a specific company or category pay out, such as earning free gas or merchandise. As with all rewards cards, the interest rates are higher, so they are best for people who do not often carry a balance. Also, reward levels change so make sure you understand what you're getting and there's more about the card you like than simply the reward agreement.
Now that you have a better understanding of yourself as a credit card user, and the kinds of cards and rewards on the market, don't apply for every card that looks good. Several credit card applications in a small period of time could make your FICO score drop slightly when multiple inquiries appear.
If you get a pre-approved credit card offer, you can still be denied. These companies only have a broad idea of what your score is on the credit card spectrum. When you apply and they check your real credit score, you might get rejected.
Doing your research can help you find the best offer. You don't have to wait for it to find you. Read the reviews and compare numbers.
While finding the perfect credit card for you means being honest about who you are and what you need now, it's also important to review your needs periodically, as they change with lifestyle and debt level. Don't forget to check your card benefits quarterly. Lenders have the right to make changes to these as well.
Why I Don’t Have a Business Credit Card (And How it Grew My Income Dramatically)
Today, I just want to share something personal that may give you some ah-ha’s around money.
I don’t have a credit card for my business.
Now, remember, I’m not a financial advisor so I’m not giving you financial advice here, but this is something that’s worked really well for me and I want to explain why.
Prefer to listen? Click below.
Lucky Bitch Video Transcript – Why I Don’t Have a Business Credit Card (And How it Grew My Income Dramatically)
Okay, I do have credit cards for personal use, but I’ve never had one in my business.
There are a couple of reasons why.
Now, in my early days in business, I was using my personal credit card to pay for business expenses. Which is obviously a big no-no and you want to separate that as quickly as you can.
But I realized that I was using that credit card with no real plan on how to pay it back.
Let’s back track a bit.
In my early 20s I got into a lot of debt because I didn’t understand how interest rates worked and I had this instant gratification mentality where I wanted something and I wanted it NOW, even if I didn’t have a plan to pay for it.
If you’re in debt right now, read my article about how to get out of debt because it really is a huge behavior change more than anything else.
My first year of business, I continued that behavior where I was just putting things on my personal credit card willy nilly, and getting into a lot of debt because I was investing in courses, programs and coaches out of FOMO, not from a place of discernment or strategy.
(and it can get you into debt BIG TIME)
Having discernment in your business spending is about looking at what your gaps are right now:
- what you need in your business
- what skills you need
- what mentorship you need
- what information you need
- what resources you need
AND making decisions based on very strategic thinking, not just, “Oh, everyone else is doing it.” Or “Oh, it looks really shiny.”
Don’t worry. I’m just as susceptible to that as anybody else and I got into a LOT of trouble around it.
After my first year, I separated my business and personal expenses. But the only card I could get for my business was a Visa Debit card. So I could only spend money I actually had in my business account.
But in reality it was awesome.
You might think, “Are there problems with just using a Visa debit card?”
I have a very successful business, but I have cash flow up and downs like any business. I have to say, I’ve rarely come across any problems with using my own money rather than credit.
A few people said, “What about security?”
Go and check with your own bank, but with my card you can still use it as a credit card, which does give you some protection, but you’re just using your own money.
I have found this to be such an amazing discipline and I honestly think it’s helped me grow my business rapidly.
There’s been times where I’ve wanted to buy something, like a course and I haven’t had the cash there.
For a minute I thought, “Maybe I should apply for a credit card so I can take the course now and earn the money later” and there’s just been a voice in my head that says,
“No. Just hang on a little bit. Go and hustle for the money first and see what happens.”
Necessity is the mother of invention, right?
I had to get creative. I’ve bundled up products and services that I haven’t thought about, I’ve contacted JV partners or affiliate partners and actually made stuff happen in my business. I learned to create that money out of thin air rather than putting it on a credit card.
Necessity helped me to hustle my butt off and make it happen.
Again, I’m just sharing my personal experience here. I’m not saying YOU have to get rid of your credit card.
Are there downsides to not having a credit card? Sure.
Like when you go to a hotel sometimes they’ll take the whole amount rather than just waiting to the end of your stay. But again, that hasn’t bothered me.
It’s been a really great discipline to only spend the money that I have in my account.
You might be asking, “What about points and all that good stuff?”
I do collect points for my personal credit card that we use for household expenses, and that’s totally cool, but for my business it’s just… yeah, it doesn’t feel worth it.
When I lived on credit, I was ALWAYS in the red. Ups and downs in my cash flow.
Now, I always have money in my account. Coincidence? I don’t know but it’s worked for me to focus on increasing my cash flow rather than juggling negative balances.
It’s been a business decision that’s worked really well for me and I’ve been okay forfeiting the frequent flyer points or whatever.
It’s made me more money in the long run than the points are worth.
I want to hear from you.
Tell me in the comments – has this sparked something for you?
- Do you want to tell me off for not having a credit card?
- Do you think I’m irresponsible?
- Has it changed your mind about using credit in your business?
- Does it scare you?
I’ve actually got a great resource for you – each time I’ve needed to create big chunks of money quickly, like for a tax bill or I wanted to invest in a new website, I’ve used a very specific process.
It’s How to Manifest Money in 24 Hours.
Go to www.LuckyBitch.com/24hours and listen to my free audio about the process that I use every time I need to manifest a LOT of money, whether it’s in 24 hours or within the next few weeks. It really works.
The last message is – I’m super passionate about women being empowered around money.
You don’t have to be in debt. I know it’s a very socially acceptable thing to have debt.
Most people you know probably have multiple credit cards.
Imagine being free from the responsibility and obligation of debt?
When you’re free from debt, it frees up so much creative energy. It allows you to take risks in life and business, doing things on your bucket list or creating big things for you and your family because you’re not tied down by debt.
You don’t have to take on clients or jobs out of obligation because you need the money to pay your debt.
It’s something that I am hugely passionate about and a great start could be not having a credit card. Try it and see if it works for you.
That’s my final message. As always, I just wish you love, luck and abundance in your life and business.
By the way, if getting out of debt is a huge goal for you, I have a great resource. It’s my own personal spreadsheet to track and eliminate your debt.
Can You Have Two of the Exact Same Rewards Credit Cards?
August 7th, 2015
When used responsibly, it’s possible to receive tremendous value from rewards credit cards. These products are so valuable to cardholders, that some even wonder if it’s possible to have two of the exact same card.
In general, most credit card issuers will not approve a credit card application if you already have an account open with the exact same product. Nevertheless, there are several possible exceptions. First, cardholders can have an account in their own name as a primary account holder, and also hold the same card issued to them as an authorized cardholder of someone else’s account, even a spouse. In addition, there are instances when cardholders have been offered a second credit card when downgrading an existing credit card with an annual fee to one without an annual fee. The card issuer may do this in order to retain a customer account, rather than have it canceled.
Furthermore, business cardholders may be approved for multiple versions of the same credit card, so long as their cards use the names and employer identification numbers of separate business entities. Another option is to open up two very similar credit cards from the same issuer. For instance, a card issuer may have a version with an annual fee, and another version without an annual fee, with very little difference between the two products. The two cards may even have the same name, but the card issuer’s systems will still consider them to be different cards, allowing applicants to potentially be approved for both. In other cases, a credit card issuer may make a slight change to a card such that it is considered to be a new product.
Finally, there are a few credit card issuers who will actually issue multiple consumer accounts for the same product to the same primary cardholder. These card issuers are rare exceptions, but they do exist. Unfortunately, card issuers do not publish guidelines on whether or not this practice is permitted, so applicants are left to search for others’ reported experiences, or simply use the method of trial and error to find out.
Why Would Someone Want More Than One Rewards Credit Card?
There are several reasons why it can make sense to have multiple versions the same credit card. First, rewards credit cards can offer impressive sign up bonuses in the form of points, miles, or cash back, so having multiple cards gives you a chance to earn these bonuses more than once. In addition, there are many credit cards that offer bonuses for particular types of purchases, but have limits on the amount of spending that qualifies, so by having multiple cards, you can earn more bonus rewards.
Also, having multiple cards can also allow you to separate your expenses. For example, you might wish to use one card for business travel that is being reimbursed by your employer, and a second card for personal expenses.
The Disadvantage of Having Multiple Rewards Credit Cards of the Same Type
Just because you might be able to open up more than one of the same account doesn’t mean you should. Having multiple accounts makes it harder to manage and makes it easy to accidentally make a payment to the wrong account. In addition, anyone who is tempted by credit cards to make unnecessary purchases or to incur debt should strongly consider whether they should be applying for additional cards.
By closely looking at the advantages and drawbacks of opening multiple accounts with the same credit card, you can decide if this strategy will work for you.