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How many credit cards should you hold?

5 MinsSeptember 27, 2019

This is a frequently asked question given the proliferation of plastic money, today. Ideally, you should hold not more than two to three credit cards. You could have one card for regular household expenses, one for emergency purposes, and the third for your lifestyle needs or high-value purchases.
Let’s discuss each one of them…

many credit cards

Credit Card #1: For regular household expenses – The credit limit on this card should be in line with your monthly household expenses, with a little more room, ensuring that you can spend comfortably and not have to compromise on things you need. For instance, buying groceries, hygiene items, toiletries, daily medicines, cooking gas, etc, typically are some of the items on your regular expense list. To choose a credit card for this purpose, seek the views of your spouse and family.

Swipe your credit card for regular household expenses both for offline transactions — at a brick and mortar store (a local shop, supermarket, mall, etc) — and online transactions (via an app or portal). Using a credit card can earn you reward points, cash-backs and/or discounts whereby you can save money as you spend.

Credit Card #2: For emergency purpose – Life can throw us a nasty surprise when we least expect it. Emergencies such as hospitalisation, medical bills, car breakdowns, unexpected house repair, and so on, catch us—completely off-guard often leaving us high and dry. This is where a credit card comes in handy.

[Also Read: How to Apply for a Credit Card Online]

The credit card for your emergency purpose should ideally have a higher credit limit. Moreover, as far as possible, use this credit card only for emergencies, when you may not have enough cash-in-hand at that moment.

Similarly, if your better half is dependent on you, consider gifting them an add-on credit card. A reasonable limit on the credit card can prove helpful to them, in case of an emergency.

An add-on credit card is offered against the existing credit card and usually has all the features of the primary card. It requires minimum documentation to apply for an add-on credit card. If you are already an Axis Bank credit card holder, you can download the form and apply for credit card today.

Notwithstanding the above, say you need access to funds; then you may even consider an instant loan against your credit card.

Axis Bank offers Instant Loans against your credit card at an attractive rate of interest with multiple tenure options available (12 months, 24 months, 36 months, & 48 months) to suit your budget, making repayments comfortable. The ‘Instant Loan’ against your credit card is offered without any documentation, and the loan amount is directly disbursed to your Axis Bank’s Savings account.

You can also use Axis Bank’s Instant loan on Credit Card calculator to know your approximate EMI.

Credit Card #3: For your lifestyle needs – Shopping, dining, travelling, movies, etc, are the lifestyle choices we enjoy. And many of you would agree that retail therapy, at times, can truly be therapeutic. It can be a mood enhancer, makes you feel good when you shop for yourself and your loved ones.

When you look for a credit card for your lifestyle needs, select the one that rewards you attractively –– in the form of reward points, discounts, and/or cash-back offers. With offers, super-saver deals on a variety of things ranging from apparels, home appliances, gold and diamond jewellery, movie tickets, or even dinner at your favourite restaurant doing the rounds; using a credit card can be a deal sweetener. Axis Bank’s Grab Deals section has a range of exciting offers for you!

There are a variety of credit cards addressing many of your lifestyle needs. For example, Axis Bank SELECT Credit Card is designed exclusively to match your lifestyle needs. Similarly, there is the Axis Bank Neo Credit Card that has fantastic offers for movie buffs, online shoppers, and those looking to dine out.

Use credit cards responsibly

If you sensibly use your credit cards, holding them can be a boon. The responsible use of credit cards facilitates managing your cash flows during the interest-free credit period (which is usually up to 50 days), earn you cash-backs, rewards points, discounts, etc. Plus, If You’re Consuming High-Value Goods And Services, At Times Opting For An EMI Facility Makes Sense.

That being said, it is important to hold a credit card that suits your needs and make it a point to pay your credit card dues on time in the interest of your financial well-being.

Axis Bank offers a variety of credit cards that can suit specific needs. For example, Axis Bank Buzz Credit Card is especially for the online shoppers and Axis Bank Vistara Infinite Credit Card or Axis Bank Titanium Smart Traveller Credit Card for someone who loves travelling.

So, analyse your spending habits to determine which cards suits you the best and opt accordingly. You need not restrict yourself to just one credit card.

Lastly, when you opt for a credit card, know your credit limit (the maximum amount you are allowed to spend on your credit cards), the interest rate applicable (in case of outstanding dues), the annual fees, grace period, and the terms & conditions.

Disclaimer: This article has been authored by PersonalFN, a Mumbai based Financial Planning and Mutual Fund research firm. Axis Bank doesn't influence any views of the author in any way. Axis Bank & PersonalFN shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.