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As long as you can pay your credit card bill on time each month and maintain a low balance on your first credit card, you should consider getting a second.
The average American has four credit cards and credit card optimizers have as many as 35. While you don't need to reach this average benchmark and definitely don't need to strive to open dozens of cards, having more than one can offer extra benefits if you manage both cards well.
Below, CNBC Select reviews three perks of having more than one credit card.
1. Maximize your rewards
Credit cards come with all sorts of different benefits and bonuses. Some offer travel rewards while others allow cardholders to earn cash back or zero interest on their purchases.
Whatever your goal may be, you can make credit cards work for your lifestyle by having one for each of your different spending needs. Choosing the right mix of credit cards involves taking a look at where you spend most of your money. This way, you know you have a good reason for getting a new credit card.
Below are some of our top choices in popular categories.
- Best for getting cash back: Alliant Cashback Visa® Signature Credit Card
- Best for filling up your gas: PenFed Platinum Rewards Visa Signature® Card
- Best for grocery shopping: Blue Cash Preferred® Card from American Express
- Best for food delivery: *Capital One Savor Cash Rewards Credit Card
- Best for streaming services: U.S. Bank Cash+® Visa Signature® Card
- Best for future travel: American Express® Gold Card (Note that, unlike typical credit cards, the Gold Card allows you to carry a balance for certain charges, but not all.)
2. Increase your credit limit
With each new credit card you get, your credit limit increases. This is an important factor for your credit utilization rate, which measures how much credit you use compared to how much you have. A higher credit limit and a lower balance are essential for a good utilization rate.
Since having more than one credit card increases the overall credit that you have available, it's important tocontinue to keep your balances low so that your utilization stays low. This is the second most important factor in determining your FICO credit score.
3. Have financial flexibility
Multiple credit cards help you afford your everyday purchases but also your emergency expenses.
You can rely on credit when you run into an unexpected expense, but with two cards you can prevent that large expense from hurting your credit score.By splitting the cost of a big expense, such as medical bills, between two credit cards, you are eating up less of your credit limit on one.
This goes back to maintaining a high credit limit overall so that your utilization rate stays low and your credit score remains high. Just make sure you can pay off balances on both credit cards before they start accruing interest.
Bottom line
Credit card optimizers have found a way to make credit work for their lifestyles. If you can pay your balances on time and in full, consider opening up a second credit card to really take advantage of the different spending rewards, an increased credit limit and a potential boost to your credit score.
*Information about the Alliant Cashback Visa® Signature Credit Card,Capital One Savor Cash Rewards Credit Cardhas been collected independently by Select and has not been reviewed or provided by the issuer of the card prior to publication.
Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
