Kolkata: A credit card is an useful tool if used prudently. One can easily apply for a second credit cards, provided one is sure about the needs and the discretion to use them judiciously and not misuse then and land oneself in a debt trap. There are a lot of benefits that one can derive from credit cards such as discounts on car fuel and air tickets, free access to airport lounges, shopping, movie tickets etc. However, there are a few points that one should keep in mind while opting for a second credit card.

Go for complementary benefits

Features of card: Since you already have a credit card, you know its features and benefits. Therefore, it is common sense to choose the second card in such a way that the benefits complements those on the first card. If one cards offers discounts on movie tickets, you can opt for a card that gives benefits on auto fuel or airline discounts.

Purpose: One should also be clear in one’s mind as to why one is going for the second credit card. Is it for splitting the bill into two cycles to put less strain on finances or is to increase access to emergency funds or is it to get new benefits that are not offered by the first card. Another thing to keep in mind is that cards could carry annual fees, transaction fees abroad and late payment penalty. One should use the second card while keeping these things in mind.

Advantages of a second credit card

India’s largest private sector lender HDFC Bank states a few advantages for having a second credit card. These are:

More emergency credit option: “If one of your credit cards is stolen or damaged and you need to make some purchases urgently, your second card will function as back-up. Hence you can keep your second credit card in a separate wallet or at home. While travelling, you can lock your second credit card in your hotel room’s safe deposit box,” HDFC Bank mentions on its website.

Lower fraud risks: The bank says that a second card can also help you to protect yourself from scams. It suggests that the second card is used solely for online transactions. If you come to notice any unauthorized or suspicious activity on it, it can be blocked immediately while the other one continues to offer access to funds in an emergency.

Variety of benefits: Credit cards can bring a variety of benefits such as discounts on vehicle fuel, airmiles and lounge access at airports, discounts on shopping, dining and film tickets. if one chooses credit cards wisely, one can cover a huge spectrum of benefits through two credit cards.

Payments can be staggered: Credit cards have separate billing cycles and if one uses two cards their cycles can be different and, therefore, one does not have to pay up the dues at the same time. Paying a bigger amount at one go — which can happen if you are using one card — can put the user under financial stress.

Lower credit limits: The credit limit that one is using on a card is watched by credit score agencies. If one uses one card, it is natural that one might use a higher limit (usually one is advised to keep it within 30%). But using two cards can divide up your needs within a lower share and this allows you to nurture your credit score to more favourable levels.