If you already have a credit card and are planning to get another one, it is vital to make note of certain points so that you do not end up getting a same or similar card with the same features. Additionally, you should be clear of your purpose of applying for a new card. It could be a higher credit limit, reward points, access to lounge or discount on shopping, and so on.
For instance, you could get a card that could compliment the old card in terms of features and benefits.
These are the key points that you could keep in mind:
I. Complimentary card: The second credit card that you acquire should ideally compliment the previous card. For instance, when your previous card is a shopping card and you are a movie buff, it makes sense to get the second card which gives discounts on movie tickets.
II. Meeting the requirement: Another point which is worth considering is that you should get a credit card which meets your current need. For instance, if you are looking for something specific – be it airmiles or reward points or higher credit limit, the new card should meet your requirement in full.
III. Additional fee: One more point that is worth considering is that the new card carries a fee which should be affordable to the cardholder. Every extra card could lead to an additional fee. The benefits of the new card should ideally outweigh the cost it carries.
IV. Credit limit: One more key feature of the new card is that it expands your credit limit. This comes handy to improve your credit score by lowering your Credit Utilisation Ratio (CUR).
V. Billing cycle: Another key feature that you should look at is that its billing cycle is different from that of existing cards. At times, some card holders use one card to clear the bill of another to stretch the interest-free credit period. For instance when one card’s interest free period is 40 days and the second card also offers a similar period with 10 overlapping days. Then the total credit period that one can use is 70 days.
Disclaimer: Mint has a tie-up with fintechs for providing credit, you will need to share your information if you apply. These tie-ups do not influence our editorial content. This article only intends to educate and spread awareness about credit needs like loans, credit cards and credit score. Mint does not promote or encourage taking credit as it comes with a set of risks such as high interest rates, hidden charges, etc. We advise investors to discuss with certified experts before taking any credit.
