Should You Get a Second Credit Card?

Posted December 1, 2016 - updated December 6, 2016 by cccadmin in

Credit Card

If you’ve been carrying around that same old credit card since university you might be missing out. Sure, your trusty old plastic friend still works, but is it working for you. In this post we’ll look at some reasons why getting a second credit card might be a good idea.

When to Apply

Shopping for a new credit card can happen any time. Just make sure the benefits are there for you to take advantage of. Ask yourself a few questions to see if it’s time:

  • Has your credit improved? You might have access to higher credit limits that may help manage your short term cash flows.
  • Has your income improved? You might be approved for top-tier credit cards with premium benefits.
  • Have your spending habits changed? Many rewards cards offer bonus earnings in select categories. It’s easy to add to your bottom line with a new card.
  • Are you looking for different rewards? Reward programs are constantly evolving. If your old card isn’t cutting it, check out the newest offers.
  • Are you carrying a monthly balance? If you have credit card debt, you can move that debt to a lower rate by doing a balance transfer. Save money in minutes!

There are some times when it’s not a good idea to apply for a second credit card. If you’re shopping for a mortgage, too many credit inquiries within a short time period can lower your credit score. It’s better to wait a while before applying for a new credit card.

What to Look For

Getting the best deal is all about finding a credit card that matches your spending habits.

If you know you’re never going to carry a monthly balance, look for the following:

  • High reward earnings. 1% is the norm. Look for 2% offers to maximize your earning potential. Generally cards with annual fees have higher reward rates. Make sure the benefits outweigh the fee.
  • Spending category rewards. Some cards offer significantly higher rewards in select spending categories like gas and groceries. Look for bonus rewards for recurring monthly bills like cell phone or utilities.
  • Unique benefits. Travel loyalty programs, insurance coverage, travel discounts, shopping portals, etc. There’s something for everyone. Look for ways to add more rewards to your bottom line.

If you plan on carrying a monthly balance, be sure to look out for the following:

  • Low interest rates. The lower the interest rate, the lass you’ll pay in interest. You’ll need good credit to qualify for the best rates.
  • 0% balance transfers. You can make a serious dent on your debt by getting a 0% balance transfer. Watch out or transfer fees. 1% of the amount transferred is the norm.
  • Annual fees. If you’re already carrying a monthly balance make sure your card doesn’t have an annual fee. And forget about rewards. There’s not a rewards card on the planet that will benefit you if you’re carrying a balance.

The Bottom Line

A second credit card makes sense as long as you use it responsibly – that means paying off your balance in full once your credit card statement comes due. If you’re already having difficulty controlling your spending on your first credit card, it probably makes sense to forgo the second one to avoid carrying more debt.