Once you have mastered the process of being a responsible credit card user, you may be wondering if you should get a second card. Before you pull the trigger on this decision, you will want to understand the pros and cons of adding another card to your credit profile. Here are four of the top reasons to consider applying for a second credit card.
To Improve Your Credit Score:
One of the best ways to continue to boost your credit score is to demonstrate that you are able to effectively manage more than one card. Having a few different cards shows that you are able to manage debt and credit. Opening another card will also increase the total amount of credit available to you. Not using all of this credit will automatically raise your FICO score, proving that you are a responsible consumer. You will also be more likely to qualify for better cards once you have improved your credit score.
To Obtain an Additional Emergency Backup:
A second card is also a good idea to protect your finances in the event of an emergency. If you lose your only credit card, you will likely be without any access to credit for a few days. Having a second card will give you a form of backup during this time. This is particularly important if you are traveling and relying on your credit to pay for the expenses. Keeping an extra card in a different place than your original will provide this emergency backup should you need it.
To Take Advantage of Diversified Features:
Not all credit cards are created equal. While frequent flyers may want to take out a card with their preferred airline in order to accrue miles for free flights, other consumers may prefer to choose a second card that highlights a different feature. For example, according to the experts at SoFi Invest, “the SoFi Credit Card now lets you redeem points straight into crypto. You’ll earn 2% cash back on all purchases and can redeem it directly into crypto with your SoFi active invest account.” This type of feature is unique to SoFi, making it a good choice for a second card for those individuals looking to invest in crypto.
To Leverage Special Promotions:
Savvy consumers also take out second cards if there is a particularly enticing promotion. For instance, some cards will offer lucrative sign-up bonuses after charging a set amount over a designated time period. Or you may choose a card that offers a 0% promotional annual percentage rate (APR) for the first year of use. This can be a good choice for individuals who know they have a big purchase coming up and want to avoid costly interest rates through other avenues.
These are a few of the top reasons that may inspire consumers to take out an additional credit card. Be sure to review your personal financial picture before deciding if this is the right route for you.