At least 80% of adults in the U.S. have at least one credit card. This finding is based on 2022 statistics.
If you’re part of this statistic, you likely find yourself with multiple credit cards. But why? Do you think it’s a headache?
In truth, credit cards are meant to be a benefit, not a burden. When used correctly, they can help you out in a range of ways. But what are the benefits of having different credit cards?
In this article, we’ll explore those benefits for you. Read on for some helpful financial tips.
Build Your Credit Score
Different credit cards can help build your credit score in different ways. If you have a mix of different types of credit cards, including both secured and unsecured cards, you can show potential lenders that you’re responsible for different types of credit.
Having different credit cards can also help you keep your utilization rate low. This is one of the biggest factors in determining your credit score. By using different credit cards and spreading your balance across multiple cards, you can keep your overall debt level low and your credit score high.
No matter what your financial goals are, having a mix of different credit cards can be a helpful tool in building your credit score.
Earn More Rewards
One of the benefits of having different credit cards is that you can earn more rewards. If you have a credit card that offers cash back, you can use it for all of your purchases and earn cash back on everything you buy.
If you have a rewards credit card, you can use it for your everyday purchases and earn points. You can use the rewards for travel, gift cards, or other perks. Common rewards include cash back, points systems, and travel miles.
Rewards programs are usually based on the amount of money spent using the credit card. The more you spend, the more rewards you can earn.
Some credit card companies also offer bonus rewards for using the card in specific ways, such as making certain types of purchases or using the card to pay bills. Just make sure you understand the taxes you pay for each transaction. The fees vary depending on the processor, which you can understand further with Wealthability.
Have a Backup Card
A backup credit card is a great way to avoid being stranded if your primary credit card is lost or stolen. It can also help you avoid paying high-interest rates if you have to carry a balance on your primary card.
Another benefit of having a backup card is that you can use it to help meet minimum spending requirements for sign-up bonuses on new credit cards. A backup card can help you maintain a good credit history if you have to cancel your primary card for any reason.
Enjoy the Benefits of Having Different Credit Cards
There are many benefits to having different credit cards, including the ability to earn rewards, take advantage of promotional offers, and build your credit history. If you are considering applying for a new credit card, be sure to compare the features and benefits of each card to find the one that best suits your needs.
Want to learn more about various personal finance topics? Be sure to check out the rest of our blog.