We have so much choice when it comes to credit cards these days and this can mean that there are many of us that actually have several of them. This can mean that we have access to more money which can be handy and that we have more flexibility when we are spending. However, there are many problems that might occur as a result of having several cards which are worth considering –
– Lose track of spending – it can be easy to lose track of spending when we use cards anyway. However, if you just have one card, you can check the balance regularly and you will be able to see whether there is enough money to be able to continue spending on it or whether you need to hold off as you will find it too expensive to repay it. Checking the balance like this on more than one card can be a hassle and is easier to forget to do. It can be easy to use the cards without thinking that you are actually spending money or thinking about having to repay the money when the bill comes.
– Forget to pay them – with a credit card you have to repay a small amount each month and this tends to cover the interest and maybe a little bit more. However, if you only pay this then you will continue to keep the debt for a long time and will keep paying interest on it. The sensible way to use a credit card is to repay all of the outstanding debt each time a bill comes so that you have no charges to pay. You can set up a direct debit for this and therefore you will not be able to forget to pay it even if you have lots of cards. However, you will need to be prepared for that money leaving your account as it will obviously disappear leaving you will less money. If there is not enough there to cover it, you could end up going overdrawn or struggling to buy everything that you need.
– Overspend – it can be really easy to spend more money than you can really afford to which could lead to you needing to find even more credit such as that
offered by payday lenders. Having a credit card can to some, feel like a lot of money that they can spend. It can almost feel like you have been gifted money that you can use to treat yourself to things with. This can then lead to lots of spending. It is good to always keep in mind that this is not money to spend but money to borrow. If you repay it quickly then you can borrow it for free but if you do not pay it back when the bill arrives you will be charged interest to pay on the debt. Therefore the money that you are spending is costing you money and you need to think about whether those things that you bought were really worth it when you are having to pay that charge for them. You need to bear in mind that the charge will go up as well
– more debt – if you have more than one card then it can be much easier to build up more debt compared to just having one card. This could become a big problem if you leave the debt to accumulate for a long time as it could be really hard to then pay it back.
So as you can see there are a lot of potential problems that could take place if you have more than one credit card. Obviously just having one card is something that you need to be careful with as you could end up spending more than you can afford to pay back but the risk is increased with the more cards that you have. It is therefore worth thinking hard before getting more than one card. Consider whether it could be better to try to increase the credit limit on the card that you have rather than getting a second card in order to get more money to borrow Do keep in mind that it is borrowing so the money is not there for spending as if it is a gift, but it will need to be repaid with interest. It can often be tempting to get a second credit card when you have spent the credit limit on another. However, this could just mean that you will pile up even more debt and end up in even more of a mess so you need to think about it all really carefully. Consider why you have spent so much and whether you need to tackle that and pay some off, rather than thinking about taking on more. Therefore, be very careful when you have even on credit card and be even more careful if you have more than one.