Applying for a couple of Credit Cards and using them wisely so that they work to your advantage isn’t enough. You need to do much more to make the most of your entire portfolio, and more importantly, to ensure that you’re maintaining it right.
But, what is a Credit Card portfolio anyway? It might just sound like a fancy phrase, but it basically means keeping an account of all your Credit Cards and using them wisely. This includes keeping a track of bill payment dates, paying dues on time etc.
Additional Reading: 5 Bad Credit Card Habits You Need To Change Right Now
If you haven’t been managing your Credit Card particularly well so far, it’s time you start doing it. Here are a few reasons that should motivate you to do so:
- Keeping a minimum number of Credit Cards and managing them well can help you keep a better track of your card bills and due dates. You can save on all the late fees you usually end up paying.
- It can minimise confusion in your financial life. As a result, you’ll be in better control of your finances.
- Your wallet becomes lighter. We know it isn’t a very significant reason to motivate you but think about all those times when you hated carrying your wallet around just because it was too bulky. Optimising your Credit Card portfolio can solve this issue as well.
Motivated enough to at least give Credit Card optimisation a shot? Great! Before getting started with ways to optimise your Credit Card portfolio, you need to take the following into consideration:
- Your needs
This is the most significant factor that decides whether your Credit Card portfolio needs some cleansing or not. Your needs may have changed from the time you got your Credit Card. It’s time to take your current requirements into consideration and check whether keeping all those existing Credit Cards makes any sense or not.
For instance, maybe you didn’t have a bike earlier and hence applying for a Credit Card with fuel rewards didn’t make any sense then. Now that you finally have that bike of your dreams, you could think of cancelling an unused card and getting one with fuel benefits.
- Your age
The second most important factor you need to consider is your age. After all, it’s not just a number when it comes to taking some crucial financial decisions. As you grow older, your needs and priorities change as well.
If you’re in your 20s, buying that dream car could be your priority. But, once you reach your late 30s, your focus might shift towards retirement planning. That’s how priorities change. Optimising your Credit Card portfolio according to your age is, therefore, the right thing to do.
Now that we know what factors you need to keep in mind while opting for Credit Card portfolio optimisation, let’s go through the strategies you’ll need to adopt to actually achieve the target. Here are a couple of questions you need to ask:
- What’s your type?
Before jumping into the ways to optimise your Credit Card portfolio, you need to find out your ‘type’. Remember all those personality tests you keep entertaining yourself with all the time? It’s something like that. You basically need to understand your personality and analyse your needs.
There’s the disciplined lot; the ones who love to stick to bill payment deadlines and never overuse their cards. Then there are those who tend to spend first and think later. If you belong to this category, you need to think about Shopping & Rewards Cards to start getting a handle on your expenses.
Then come the ones who hate being in debt. No matter how badly they want to buy that luxury handbag or the latest iPhone, they’ll never swipe their Credit Card for it. For them, their plastic friend is meant to be used only in case of emergencies and unforeseen expenditures. Everything that’s not an emergency can wait!
We hope you figured out your type. Now, let’s move ahead.
- What does the market say?
Instead of snatching at the first Credit Card offer that comes your way, it’s better to analyse the market well and hunt down the best deals. Now that you know your type, looking for the best and the most suitable card should be easy.
There are a couple of factors you need to keep in mind though. If you want more rewards, you need to choose accordingly. Another major factor that you need to keep in mind is your spending habits. If you belong to that category that likes to maintain a balance on their cards, you should aim at getting a low-interest Credit Card. Make sure you always read the fine print though and don’t overlook the transfer fee. If you want to stay on the safer side, looking for a card with a low fixed interest rate will make more sense. Don’t let the introductory offers blind you. Always think about the bigger picture.
If you want to be on the safer side, looking for a card with a low fixed interest rate will make more sense. Don’t let the introductory offers blind you. Always think about the bigger picture.
- What’s your Credit Card count?
After exploring the market, you can finally get down to analysing whether you have the right set of cards or if you need to make any changes. Since you know your needs and preferences the best, you can choose to apply for cards that can help optimise your credit usage.
One thing you need to always keep in mind is that you mustn’t apply for a couple of Credit Cards simultaneously. Why? Applying for too many Credit Cards at a time can severely damage your Credit Score. Always plan your moves smartly. If you have a decent score, space out your applications. It’s all about getting the right card at the right time.
- Have I scanned my wallet?
Following all the steps above isn’t enough. You also need to carry out the most important part of the drill. You need to scan your wallets and cupboards for other unnecessary Credit Cards. Why keep cards you don’t need anymore?
If you’re still unsure about which cards to keep and which ones to let go of, don’t worry! The math is pretty simple. If you have a couple of cards with a high annual fee, and you don’t use that card much, it’s time to get rid of it.
If you already have a couple of cards to take care of all your needs, keeping other cards doesn’t make any sense anyway. So, put those detective glasses on and hunt all those culprits down. The sooner, the better.
Additional Reading: Credit Cards With Zero Annual Fees In 2017
Choosing which Credit Card to stand by and which one to let go can be a little difficult. But if you’re clear about your needs and preferences, it shouldn’t be an uphill task. Now that you have everything you need to know, you don’t have any excuses to postpone doing it either.
Also, what you need to remember is that Credit Card portfolio optimisation is not just a one-time thing. You need to do it at regular intervals. You also have to resist temptation and not fall prey to all those attractive Credit Card offers around you. You’ll always be surrounded by people who’ll try to lure you with the benefits of getting a new Credit Card. While some cards might seem great, they might not be a perfect fit for your financial situation.
Getting the right Credit Card is almost like finding the right soulmate. If you choose the right one, it will fill your life with joy. But, if you hurry things up and fall for the wrong one, we all know the consequences, don’t we?
If you’re looking for the right Credit Card, we have a couple of options for you to choose from. What are you waiting for? Explore them now!