Credit card
Nowadays, as soon as a person starts using credit cards, in a short time other banks also start contacting him to give credit cards. But in such a situation, the question arises in the mind that when there is one card, then why take another and take another card is right or not?
The answer is often ‘no’, but if you think wisely, then it can be beneficial to keep more than one cured card many times. Let us understand in detail that in which circumstances it gives benefit and in which conditions it should be avoided.
Credit history has to be made so second card will work
If you have recently taken a credit card and you want to take a car loan, home loan or personal loan in future, then it is necessary to make good credit history. Credit history is formed when you pay the bill on time and use the card properly. In such a situation, keeping more than one card gives you a chance to do more transactions, which makes your report stronger.
To increase credit limit? So two cards beneficial
Suppose you have a card whose credit limit is 2 lakh rupees. Now if you take a second card, whose limit is the same, then overall your credit limit will be 4 lakh rupees. This not only gives you the facility to spend more, but it can also be very useful in emergency.
To improve credit score? Control Cur
An important part of the credit score is Credit Utilization Ratio Cur. If you understand in easy language, it tells how much you have used from your total credit limit.
For example, if your limit is 2 lakh rupees and you have spent 1.6 lakh rupees, then your CUR was 80% which is very high. Ideally it should be less than 30%. In such a situation, if you had a second card, you could have distributed the expenses into both. This would have reduced your utilization ratio and improve the credit score.
Not taking two credit cards for everyone is right?
Some people keep credit cards but use them very little, such as only hotel booking or needs. Taking a second card can become a headache for such people, because it is necessary to fill the bill on time with every card and keep the track.
Apart from this, if you use your existing card carefully and your expenses are less than 30% of its total limit, then you will take the burden of unnecessarily on yourself by taking another card. In such a situation, you do not need to get a second card to improve the credit score.