When is the Right Time to Get a Second Credit Card?

If you are a credit card beginner using only one card for a long time, you may want to get a second credit card. A new credit card not only provides you with an additional credit limit but you are also in a position to find a card that caters to your needs. Though the idea of getting a second credit card looks promising because of all the benefits that it entails, is it the right time for you to get one? Let’s talk about the situations in which you should or should not get a second credit card.

When you Should Apply for a Second Credit Card?

You can consider applying for a second credit card in the following situations:

• When you want to improve your credit score- The effect on your credit score is probably one of the major concerns about having multiple cards. Having more than one credit card can actually help your credit score by making it easier to keep your credit utilization ratio low
• When you want to have a backup in case of emergency- In case your credit card gets stolen or some other kind of emergency comes up, there should be a backup credit card. When you lose your credit card, the majority of credit card companies will provide the replacement within 72 hours, hence you should have one as a backup
• When you want to diversify card benefits- At the time of taking your first credit card, you have limited options as only a few issuers in India are ready to give cards to those who are new to credit. In such a situation, it may be difficult for you to find a card that matches your spending habits.However, when you are taking an additional card, you would have more options and you would also be better acquainted with the types of benefits you can get on a credit card. For example, if your first credit card has a basic rewards programme, you can move on to a cashback credit card or one that focuses on different types of benefits such as travel, entertainment, dining, etc.

When you Should not Apply for a Second Credit Card?

There are situations where you should not consider applying for a second credit card:

• When you have recently applied for a credit card- When you apply for a credit card, it initiates a hard inquiry on your credit profile. Too many such inquiries in a short period of time may lead to a substantial drop in credit score and may make the lenders interpret that you are a credit hungry person
• When you are struggling to pay the one credit card bill you have- You should definitely wait to apply for a credit card if you can’t pay off the existing credit card you own. You should also avoid another credit card if you are an over spender and are likely to fall in credit card debt. Wait until you are confident about your financial situation and spending habits before applying for a second credit card
• When you are planning to apply for a loan or mortgage- You should definitely avoid applying for new credit if you will be seeking other forms of credit such as a home loan. A new line of credit might lower the average age of the accounts, as the lenders like to see long credit histories

What to Look for in a Second Credit Card?

It can  be rightly said that your criteria for choosing a credit card might look different when you go for your second card. We advise you to keep the following points in mind while applying for your second credit card-

Know When the Time is Right!

A second credit card might provide you with additional perks including higher cashback rate, no foreign transaction fee etc. But before choosing a second credit card, make sure you are ready, you actually need it and you have enough financial backup to support your decision. A second credit card would definitely boost your credit score and be a great backup in case of emergencies. Just make sure you can truly afford it.