Today the credit card industry has allowed its customers to have the cake and eat it as well. Gone are the times when people used to maintain a single credit card, to fund them in times of personal financial emergencies. Today, the season’s trend is to hold a wide variety of credit cards in order to possess greater financial flexibility with a larger credit limit. Customers today also want to acquire the best deals, offers and concierge services which come with a powerhouse of multiple credit cards. Since an average credit card holder is a frequent traveler too, these cards serve as an effective alternative against cash. While the power to possess so much may seem quite rosy in the initial stages, it all depends on how well you manage these cards and clear your dues on time. Yes, the trick is to play your cards right.
While India has witnessed this emerging trend, where Indians are beginning to possess more than one credit card, this trend has gained surprising popularity swiftly, almost doubling in its number users. This is a trend that is indulged in by the young, affluent and elite India, where credit card users are savvy, well-off and quite prudent in use. They usually belong to the working segment of businessmen, executives and managers of firms in the country, especially in urban cities and metros. The reason why multiple credit cards have become quite a craze in the country is quite simple. Different credit cards cater to different segments of people and their needs. With every customer having his own unique expectations and needs, people opt for a wide variety of credit cards to furnish each of their specific needs and requirements, which ranges from fuel and petroleum, traveling, dining and shopping. Further, these cards offer additional supports and benefits like the extra advantage of a higher credit limit, financial security in the form of contingency back up cards, a lower interest rate for revolving credit and other privileges that are exclusive to that credit card.
With the popularity of co-branded cards also rising, customers are offered additional inherent benefits like discounts on shopping for various products or purchasing at select stores, outlets or malls. Also, with the aggressive marketing and promotional tactics of credit card companies, customers are easily pulled in with the promise of no registration or annual fees. With this, today, customers no longer hesitate to sign up for a large number of credit cards, saving their use for a later date. This can be noticed in the way customers usually use their credit cards. Often, people rank their credit cards by way of its features and accessibility as first preference cards, second preference cards, and so on, thereby using only two or three credit cards out of all the multiple credit cards they possess. This not only helps them to effectively manage their expenditure, but also you may gain more with loyalty points by frequently using a couple of credit cards rather than distributing your use over multiple cards.
Although this trend is expected to rise in popularity over the next few years, owing to a rise in incomes and standards of living, wealth managers in the country strictly advise against the possession of multiple credit cards. This is because it may lead to mismanagement on the part of the credit card user as it will be difficult to keep a track of the different due dates of different credit cards. This can lead to a high rate of fines and penalties on late dues and payments prompting you to avail personal loans or any other type of loans to repay the debt on your credit cards. Also, you must watch out for the terms and conditions of different cards as some cards may be free for just the first year, with additional annual charges being bombarded from the next year onwards. Thus, stick to a maximum of two or three credit cards in case you have an additional need of money, and manage them in a prudent and cautious manner.