by Joseph Kenny | 10/15/09
Credit cards often get a bad wrap. They are seen as vehicles to financial ruin or at least to debt. It is easy to forget all the good that credit cards can do. In fact, it is easy to think that less is more with credit cards, that having only one credit card is the best way to restrict your excess spending while still having the benefits of a credit card.
The interesting thing is that when it comes to credit cards less isn't more. Actually, within reason, more is more.
Having A Backup Plan
In this instance, your backup plan would be a second credit card. If your main credit card is stolen then you can rely on your backup credit card to get you by until the main credit card can be replaced. This, of course, only works if the second credit card is stored separately but is a logical reason to have more than one credit card at your disposal. You never know when your main credit card will be lost or damaged so having a replacement on hand can make dealing with this type of problem infinitely easier.
Online Safety
Another reason to have more than one credit card in your possession is for your online shopping safety. So much shopping is done online these days that having a credit card to use for this purpose is a requirement. Having this credit card be requisitioned solely for online shopping can help to keep your financial identity safe. As popular and safe as online shopping has become, your identity or your credit card information can still be stolen in the course of online transactions.
Attempting to avoid this through careful online dealings is rule number one, but identity theft can happen even when you are careful. You know that if your identity or credit card information is stolen then you want to realize it as soon as possible. This way you can handle the situation and cancel your credit card if necessary.
If you only use one credit card for shopping online then fraudulent purchases become easier to spot. They will not get lost in a sea of random items because this credit card will only be used for online purchases, reducing the chance that fraudulent charges could become obfuscated by the many other daily charges that may be heaped upon your main credit card. You will be able to address and fix the fraudulent charges sooner.
Boost Your Credit Score
This method of boosting your credit score must be used with care. Getting a whole slew of new credit cards will not necessarily send your credit score skyrocketing. In fact, opening a number of new credit accounts at once could have the reverse effect.
Having multiple credit cards with a responsible credit history is a good thing. This can increase your credit score. Having a large amount of available credit is also seen as favorable as long as you are not carrying high balances on these credit accounts. Having a lot of available credit but little debt is the best combination for your credit score.
Multiple credit cards can serve as a backup plan if you lose your main credit card. Also, they can help keep you safe online. Finally, they can help out your credit score. These are several benefits of having more than one credit card.