When Should You Apply for a Second Credit Card?

You have been an owner of a credit card for a long time now and you have been using it responsibly. And then you start realizing that a single credit card does not fulfill all your needs in terms of reward points, cashback, and various other benefits. What should be done in such a situation? There are plenty of credit cards that provide you with amazing benefits on your day-to-day purchases done towards grocery and departmental stores, travel, and many more categories. Considering all these factors, you might think of applying for another credit card. But before applying for one, you should think about all the features that are missing in your first credit card according to your spending pattern and what you need in your second credit card.

When Is It Right To Get a Second Credit Card?

Getting a second credit card can help you in improving your credit score and also provide you with other benefits such as increased credit limit, better rewards, etc. But the question is when is the right time to apply for another credit card. A generic answer to this question is that there is no such perfect time to apply for another credit card. It depends on the personal needs of an individual when he wants to apply for another credit card. It can be a good time to apply if :

You want more benefits or rewards:

Your first credit card might not provide you with the rewards that you deserve on the basis of your expenditure towards a single category because you might just have applied for it on a pre-qualified basis. But now you can explore all the credit cards available in the market that provide you with accelerated rewards under the same category and apply for that card.

High-interest rate:

You did not have knowledge about variations in interest rates from card to card. Being your first card, you chose the one that was available for you. But now since you have been using a credit card for a good time, you have attained knowledge about low interest credit cards. Then this is the right time when you can apply for another credit card because the one you already have charges high interest than the others present in the market.

To improve your credit score:

Credit cards are a convenient tool to improve your credit score if used wisely. If you are able to manage your credit utilization ratio and pay off all your bills well in time, a credit card will definitely help you in improving your credit score. Having more than one credit card will help you improve your credit score as it will lower your credit utilization ratio.

Also here: Ways to Increase Your Credit Score Fast

Change in spending habits:

Earlier you had a card that was a Miles Card, which used to provide you Travel Miles on your spending, but now you have changed your job and now you don’t travel that often. And now you want a card that provides you with benefits on your grocery and departmental store spending or provides you dining benefits.

Wide options to choose from:

In a case where your credit score has improved recently, now you have a wider option of credit cards to choose from with better rewards, amazing benefits, and higher credit limits. A good credit score can unlock access to owning premium credit cards.

Responsible debt management:

You have to self-assess whether you will be able to manage the debts pertaining to the second card as well. You will have to prioritize making on-time bill payments first and keep your debt balances as low as possible. It should be very clear that more credit cards do not mean spending more than what you can afford to pay off.

Also Read: How Many Credit Cards Should I Have?

Things To Keep in Mind

Now that you have decided to apply for a second credit card, you should keep a check on the following points before you apply for a second credit card:

• Determine your needs: Identify the reason for which you need to apply for a second credit card. It can be any like for travel, dining, shopping, business, etc, and then choose from the maze of cards available as per your credit score and history.
• Review charges and cost: Sometimes credit card companies advertise their card as being free but that comes with certain terms and conditions. You need to analyze every term mentioned by them carefully and then opt for your card. You also need to look out for other charges such as late fee charges, cash advance fees, annual fees, and foreign currency transaction charges especially when you are a frequent abroad traveler. This fee can be minimized by opting for a card that best suits your travel needs.
• Perks: You should always look for a credit card that will provide you with better reward points and cashback deals as compared to the existing credit card that you own. You can always look for a card that provides you accelerated reward points and cashback on the basis of your spending.

Bottom Line

Opting for a second credit card can be amazing yet challenging. While on one side your purchasing power will increase, similarly on the other side, your ownership of paying the debts will also increase. Ultimately, it is only you who can decide whether you need a second credit card or not but once you have decided to go for a second credit card, you should compare all the options available to you on the basis of your spending habits and choose one that will help you in earning more rewards and cashback. Although there will be an increase in your purchasing power with the second credit card, you should always think twice before spending through your credit card. You should always try to make out ways in which swiping a credit card would be beneficial for you as you will only benefit from a credit card if you use it wisely.