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Swipe & Sign: Managing Multiple Credit Cards. Author: Fintuned | Date: March 26, 2014

We all have childhood memories and however old we grow, they never fade (BTW, I have not grown that old). Just the other day, one of the memories came back to me related to situation that a good number of us would have encountered. As kids, the only piece of paper that frightens us is the “Report card.”
So, I will just give you the excerpt of a situation that happened a long time back:
My mother (also, my teacher then) was rebuking me for scoring below my potential (I always thought, what score should I get to justify my potential, phew!) even while the result was pretty good. And while this was happening, my dad steps in and says ” Give him a break, he has done a commendable job and presents me with a nice gift”. The consequence is that I am all cheered up and lively again.”
Sorry, if the introduction seemed a bit long but my intent is to drive home a point: Such appreciation and recognition boosts our ego and provides us with required satisfaction.

What your bank knows and does!

Now imagine this situation: You have a well-paying job and a good financial life but as always, it is not possible to understand if it is justified based on your potential and that bothers you. At that point, you get a mail from your bank saying that: “You are pre-approved for a Gold credit card with a credit limit of Rs 3 lacs.”
The first words that might come out of you could be “Wow, this is amazing.” So, your bank plays your dad and tells you. ” Hey, that is a commendable salary and you are definitely a high-earner. Therefore, we have a small gift for you : A gold credit card.”
I understand if someone might not agree with the premises of the given thesis but my point is this: Besides the convenience and other factors that make people love credit cards, the owning of a credit card is turning into a status quo these days.
Gold, Platinum or Titanium is the question that generally goes around while comparing credit cards instead of charges, rates or offers. An idea called “The Almond effect” comes into play while we apply as well as use the credit cards. Please, read this interesting analysis here.

The BIG difference between your Dad and your Bank.

Simply put, your dad offers you a gift in an attempt to cheer you up with no latent intent but with banks it is different. The primary motive behind that flowery mail is that you apply for the credit card and give the bank an opportunity to earn via interest and card charges.

Please note that I am in no way opposing the idea of having credit cards and not even demeaning the way banks convince you about the viability of cards (There are enough blogs on that).

Now, to Management of Cards.

The fact is that we like credit cards and while it offers several advantages, there are certain things you should know and follow in case you have multiple credit cards:

Well, The very first thing is to have a wallet with a good number of slots ( Haha, just kidding)

Actually, the first thing to do is learn about some of the terms that are related to credit cards. These are actually quite easy to understand and will ensure you that you are not stuck the next time you are researching on credit cards.

Interest rate: This is the price you pay to the credit card company for the privilege of borrowing their money. Now, if you are a lousy payer, then this interest rate may shoot up to double-digits and keep on accumulating. 

Trickery alert : Lately, credit card companies have come up with zero interest credit cards, which convinces people easily. However, most of the times, the zero interest rate is only valid for first few months after which the rates are as usual or even higher.

Grace period: Grace period is the time between the end of your billing cycle and the date your payment is due. The longer the grace period, the better. The Grace period is not applicable if you have any amount due on your credit card.

Note: Having a credit card is useful to build your credit score and a good credit score is highly valuable for any of the future purchases. The way you use your credit cards and repay the dues has an impact on your credit score.

Mug this up:

Multiple cards = Multiple bills = High probability of misplacing a bill or missing out on a payment. However, as I mentioned earlier, keeping multiple cards is absolutely fine if you can manage them well.

So here are some tips for that (I am sure they will help):

  1.  Dedicate certain cards for specific spending, so that you equally use the credit limit on all the cards.
  2.  Do pick the right credit card for each purchase so that allow you are able to accumulate rewards  points, cash back, or another types of incentives. Trust me, you will SAVE MONEY!
  3.  Do not retain unused credit cards. You may be paying an annual fee or charges without realizing it.
  4.  Use internet banking to pay the statements on multiple credit cards.
  5.  Set a monthly reminder on your calendar or mobile phones to make timely payments. 

Kudos, I am sure you can manage your cards well! As always, please offer your thoughts/opinions in the the comments section 🙂



Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy of any agency, organization, employer, or any company. Fintuned Co. LLP shall not be held responsible in any manner whatsover, for any decision/action taken by readers on the basis of the content mentioned in the article. Readers are requested to exercise their best judgement before taking any decision/action. Fintuned Co. LLP shall also not be held responsible for any copyright infringement committed by the author in the process of writing and/or publishing this article and in the event any such offence is found, cooperate with necessary authorities to take remedial action


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