These practices can help you get the greatest benefit from multiple cards while maintaining a healthy credit score:
Nothing is more important than paying on time. Through mobile and online banking, you can set up automatic payments and reminders to help manage multiple due dates. It’s always best to pay your card balances in full every month to avoid interest charges. If you can’t pay off the balance completely, make at least the minimum payment on each card and as much more as you can.
If you’re making only the minimum payment on each card, you might want to reassess your spending and consider strategies to pay off your credit cards.
Be careful not to use your additional credit cards to go deeper in debt. Lenders prefer that you use less than 30% of your credit limit. This applies to each card individually, and to all your cards added together. Your credit score could take a hit if the balance on just one card is more than 30% of that card’s limit—even if the total balance on all your cards is less than 30% of the total credit limit.
Leave older cards open and use them occasionally to prevent them from becoming inactive. This will give you a longer credit history and higher overall credit limit, both of which are helpful to your credit score.
Be judicious when it comes to applying for new cards. Applying for several cards within a short time can negatively affect your credit score. Each application triggers a hard credit check that’s recorded on your credit report and may make you look riskier to lenders.
If you’re planning to buy a car or a house, it’s a good idea to avoid applying for new credit cards for at least six months.
Multiple credit cards won’t necessarily harm your credit score. In fact, under the right circumstances, they can improve it. The key is to use your cards strategically, pay on time, keep an eye on how much credit card debt you’ve got and—perhaps most critically—don’t let the availability of credit alter your budget.
We're here to help. Reach out by visiting our
Contact page or schedule an appointment today.