Assume you are travelling across India, and you run out of cash. The network is sketchy, so you cannot transact via UPI while buying necessities. Here, your credit card plays the role of an essential financial tool. Moreover, they have several benefits, such as rewards and cashback. Thus, it is not rare to own several credit cards.
However, having multiple cards can become complex if not handled properly. The good news is that by meticulously planning and strategising, you can effectively manage multiple credit cards and avoid the hassle associated with them.
Maintain accurate records
Having your finances organised is something you need, not just something you want. You will want to write down all the information for your credit cards, including the account number, credit limit, and payment due date.
Budgeting software or a spreadsheet can be used to track your financial data. This allows you to track your expenses and pay bills in a timely manner. For example, you can note the credit limits on each card so that you are not over the limit.
Set up automatic payments
You can set up an automatic payment function for the minimum amount due. Most banks have online credit card facilities that enable you to make automatic payments via their easy-to-use apps. It spares you from late fees and penalties. With automatic payments, you can ensure timely payment of your bills even if you are occupied with other commitments.
Regularly review your statements
One key tip is to check your credit card statements regularly. This will help you realise if there are unauthorised charges or errors. It will also help you detect problems beforehand and keep a check on your finances. You can use budgeting tools to allocate your expenses on several credit cards over categories and identify where you are overspending.
Be cautious of credit utilisation
Try not to overuse your credit cards. Make every effort to maintain your balance below or equal to 30% of your credit card limit on all your cards. If you reach the 30% limit of your credit card, consider asking your card issuer to increase your credit limit. This will enable you to spend more effectively and maintain a healthy CIBIL score.
Prioritise high-interest debt
If you have several cards with different interest rates, pay off the one with the highest interest rate so you will pay less interest in the long run. You could also transfer your credit cards balance with balance transfer card or personal loan.
Balance transfer cards usually have a 0% introductory APR (Annual Percentage Rate), typically ranging between 12 to 18 months, so you can pay debt without incurring interest. Personal loans usually have lower interest rates than credit cards and can make payment easier.
Conclusion
Handling multiple credit cards involves a proper plan. With proper planning, technology, wise spending, and payment decisions, you can reap the advantages of multiple credit cards without accumulating too much debt. By remembering these tips, you can easily manage your credit cards and lead a healthy financial life.
