Why Owning Multiple Credit Cards Requires Strategy and Discipline
When it comes to credit cards, it’s important to be strategic and disciplined. Ritesh Srivastava, Founder & CEO of FREED, advises consumers to carefully consider their needs before owning multiple credit cards. Instead of owning four or five credit cards just for the sake of it, identify what you can afford to pay off in full each month. It’s recommended to have a few credit cards for specific purposes, such as one for expenses and one for travel. However, financial discipline is crucial.
The Pitfalls of Having Too Many Credit Cards
If you own multiple credit cards without a clear strategy, you may find yourself in a debt trap. Without proper planning, there’s a risk of rotating balances and making minimum payments. It’s essential to use credit cards wisely and repay balances in full at the end of each billing cycle. For example, if you frequently travel, using a travel card with benefits like miles accrual and lounge access can be advantageous. Similarly, a lifestyle card from American Express or other issuers can offer rewards and discounts for shopping and dining. However, if you don’t manage your balances effectively, it can lead to financial trouble.
Beware of Tempting Offers During the Festive Season
During the festive season, banks often entice consumers with attractive offers and reward points. While these offers may seem tempting, it’s important to approach them with caution. Look into your reward points and see what rewards or points you can redeem while shopping. Take advantage of early shopping and use discount coupons. Differentiate between low-cost EMI offers, zero-cost EMI offers, and plain EMIs to make informed decisions. Also, exercise control over your spending during this time and have a repayment strategy in place to avoid running up excessive charges on your cards.
Hot Take: Be Strategic and Disciplined with Your Credit Cards
Owning multiple credit cards can be beneficial if you have a clear strategy and exercise financial discipline. Assess your needs and choose cards that align with your spending habits. Use credit cards wisely, making sure to repay balances in full at the end of each billing cycle to avoid falling into a debt trap. During the festive season, take advantage of offers and rewards but approach them with caution. Shop early, use discount coupons, and be aware of the different types of EMIs available. By being strategic and disciplined, you can make the most of your credit cards without getting overwhelmed by debt.
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