Ah, the dreaded credit card. On the one hand, it’s a limited supply of “free” cash. On the other, it’s a dangerous piece of plastic that can land you with a mountain of debt. It’s no wonder, then, that people are skeptical when it comes to having too many Visas or MasterCards in the back pocket. After all, credit cards can’t be trusted! Or can they? The only reason bad things happen is that the people in charge (you) aren’t responsible. If you have a level of organization, you might benefit from the following.
Higher Credit Score
It’s no secret that your credit rating goes off your ability to manage cash. Usually, this can include everything from paying a cell phone contract to taking out a loan. Obviously, the biggest indicator that you are trustworthy will cash is a credit card. As long as you pay back the balance every month, the bank will see you are a reputable lender and it will reflect in your rating. You don’t even have to pay off the full balance. Setting cards to the minimum each month won’t affect your score, although it might harm your finances. Of course, the more “clean” cards you have, the easier it is for creditors to judge.
As long as there is a reason to open a new card, it makes sense to use it time and again. Take customer rewards as an example. A Delta Reserve card is an excellent tool if you book regular flights. By using the card to pay for everyday items, you rack up air miles or “Medallion miles” as they are known to Delta. After a while, the bonuses will allow you to upgrade to first-class and check baggage for free, which is a money-saver. Supermarket credit cards offer similar rewards but in a store context.
No one should open a new account without first having a plan of attack. People that take out credit cards before thinking are the ones who end up saddled with debt. Of course, the flip side of the coin is that you shouldn’t prepare to fail because it leads to a negative mindset. Whatever your morals, an exit plan is essential to limit the damage. Thankfully, debt consolidation loans and programs ensure that you don’t have to pay a fortune should the worst happen. There is also debt settlement which may wipe away chunks of the overdue balance if you are eligible.
Shockingly, the average person doesn’t understand their finances. There is no doubt this can lead to major problems further down the line, which is why you need to learn. It seems extreme, but managing multiple credit cards is a learning curve you need to understand the process. To do it properly, you have to be in tune with your incomings and outgoings and be obsessive. As a result, you will begin to work out the system and become financially savvy.
Are you a credit card hater? If so, has the information above changed your mind about opening multiple accounts?