This guide outlines how having an extra credit card has advantages over just a single card for business or personal use.
More consumers are starting to see credit cards as powerful tools for managing expenses, earning rewards, and building creditworthiness. However, some countries are behind others in this. For example, the Philippine market is still behind many other Asian neighbors in credit card adoption, largely because cardholders often try to hang on to their first card and depend on it for all non-cash purchases.
This loyalty to one card is not necessarily a bad thing. Having one card vastly simplifies your ability to manage credit and does help reduce your annual fees. However, maintaining more than one credit card is a strategy that potentially provides more financial flexibility, which is why you should consider an extra credit card.
The payments market is constantly changing and getting a second card can now be a good way to take advantage of newer, more generous rewards programs. A backup card can also provide a welcome layer of redundancy if your main card’s network is down or if there’s an issue with a merchant’s point-of-sale system.
If those benefits sound good to you, a two-card strategy could make sense for your situation. If you don’t have a credit card yet, try searching “first-time credit card application Philippines” to get an idea of the requirements. Meanwhile, if you already have a card, try to see if it actually makes sense to discontinue your current card and either get two new cards or just get something that does it all.
Tactics for choosing an extra credit card
In any case, don’t forget to do the following when you are shopping around for new credit cards:
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Always Compare Interest Rates and Fees
Your main card should have lower interest rates and fees compared to your backup. If your extra credit card offers better terms, consider switching it as your main card or even making it your only card.
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Make Sure the Reward Programs Fit Your Lifestyle
Make the card with the best rewards for your primary credit card. For example, if a card gives higher cashback rewards for groceries at a supermarket that you always go to, then it should automatically be your main one. Use your backup for other uses like dining out, big-ticket purchases, or international travel.
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Check for Exclusive Perks and Protections
Speaking of rewards, some credit cards come with extra perks like travel insurance, purchase protection, or extended warranties. These aren’t always useful for everyone but they could be just the thing if you travel frequently or have to buy expensive gadgets for work. This reward card can be your primary option or a fallback, depending on how frequently you might need those perks.
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Set a Spending Purpose and Limit for Each Card
For simpler management, assign specific spending categories to each card. Again, your main card should be assigned to everyday purchases like groceries and fuel. Your sextra credit card should be for bigger one-off purchases or expensive experiences like travel.
With both cards, you’ll also want to assign spending limits that are well below your official credit limits to better maintain your credit rating. Keeping each card’s purpose should help you make the most of the rewards from both cards and keep missed opportunities down to a minimum.
If you need extra security, you can consider an extra credit card that allows you to spend different spending limits depending on the platform. For instance, you can set a separate limit for online shopping, in-store shopping, and total daily purchases. This additional layer of protection can help you better track how you’re using each of your credit cards.
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Consider Each Card’s Credit Limit
As a general rule, the card with the higher credit limit must be your main card. A higher limit will keep you from maxing out your card too quickly and give you some breathing room before your credit score is affected. Reserve your backup card for occasional purchases that match its reward structure.
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Don’t Forget to Keep Your Backup Card Active
One of the biggest challenges of a multi-card strategy is ensuring that the extra credit card stays active. If you’re maintaining a backup card just for infrequent big-ticket spending, you can easily go a whole year without using the card, which can make it more trouble than it’s worth. Either consider scheduling some relevant purchases on your second card or just go with a single-card strategy until you find a backup that you can use more frequently.
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Factor in Card Payment Due Dates
Using two credit cards means you must keep track of two payment due dates. Ideally, your main card should have a due date that aligns with when you typically pay bills. This way, you’ll be in a much better position to avoid late fees.
Summary
If you can use them responsibly, keeping two credit cards can give you significantly more flexibility. Now that providers are competing on perks and rewards, there has never been a better time to adopt a multi-card strategy for managing your finances and spending less than you normally would by just using cash alone.
However, financial discipline is key to reaping the benefits of credit cards, no matter how many you have. If you can avoid overspending and pay your balance in full well before they’re due, having an extra credit card may be just the thing for nudging your finances toward better stability over the long term.
