Benefits and drawbacks of having multiple credit cards 

4 MinsDec 14, 2022

A credit card gives easy access to credit. It allows a person to borrow money via a fixed credit line. Not only can they shop and pay through a credit card at merchant outlets and even online, they can also use it to withdraw cash from an ATM. Credit card holders also earn reward points and get interest-free credit on their cards before making credit card bill payments.

Benefits and drawbacks of having multiple credit cards

Such benefits encourage people to apply for multiple credit cards. Nevertheless, people should weigh the benefits and drawbacks of multiple credit cards before applying for a new one.


1. Get a higher credit limit 
People having multiple credit cards become eligible for higher credit limits. For instance, if they own 2 cards with credit limits of Rs. 60,000 and Rs. 80,000 then their total credit limit is Rs. 1.40 lakhs. They can thus make more purchases on credit via multiple credit cards.

2. Have different credit card bill payments 
Credit cards have different billing cycles. So, a person with multiple credit cards can juggle their payments between multiple cards. This gives them the time to manage their multiple credit card payments.

3. Get a longer interest-free period 
A credit card’s interest-free period is dependent on its billing cycle. For example, a credit card's billing cycle is on the 30th of every month. The cardholder makes the payment on the 18th of the month. Then, they get to enjoy an interest-free period of 30 days. Having multiple credit cards gets them a longer interest-free period. So, if the said cardholder has another card whose billing cycle is the 15th of a month, they can use their first card for shopping till the 15th of the month and the second card to shop from the 15th to the 30th of the month. Thus, they get to enjoy a longer interest-free timeline.

4. More rewards and incentives 
Credit cards help earn reward points and offers on shopping. For example, buying movie tickets, grocery shopping, and so on. Having multiple credit cards means more rewards and offers. New cards may give good incentives like cashback on fuel. For example, the Indian Oil Axis Bank Credit Card offers 4% cashback on fuel purchases at Indian Oil Petrol pumps. So, for regular car users, cashback on fuel would help them offset their fuel expenses to some extent.  Likewise, Axis Bank Buzz Credit Card offers great rewards for online shopping like a 10% instant discount on Flipkart from the 1-5th of each month.

5. Improves credit score 
Owning multiple credit cards helps improve a cardholder’s credit score. The credit utilisation ratio has a direct bearing on a cardholder’s credit score. Multiple cards mean a higher credit limit. So, the credit utilisation ratio is low even after higher card usage. It helps in improving the credit score.

[Also ReadImportance of choosing a credit card that suits your needs]


1. Easy to fall into a debt trap 
Cardholders owning multiple credit cards may use them carelessly. By spending more than they should, they could end up in a debt trap. It also means higher interest charges to be paid.

2. Difficult to track different credit card bill payments 
With different bill payment cycles, it becomes difficult to manage multiple cards’ due dates. If they miss any credit card bill payment date, then they have to pay a higher interest rate. Also, default on card payments brings down their credit score.

3. Hidden charges 
Credit cards have hidden charges like late payment fees, annual fees, etc. Multiple credit card means a cardholder has to understand all these hidden charges.

4. Shows a credit-hungry appetite 
Lenders consider customers with multiple credit cards as credit hungry and highly risky. It may impact a customer’s ability to get bigger loans like home loans or auto loans sanctioned.

Credit card holders think that having multiple credit cards is a good idea. They get greater flexibility, higher credit limit and more reward points. Yet, managing multiple cards can be difficult. If they do not use their credit cards smartly, they could increase their debts. Axis Bank offers various credit cards with benefits suited to their customers’ needs. Customers can avail Edge Rewards based on their credit card spending pattern. For more info on Axis Bank Credit Cards, click here.

Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author 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.