3 Reasons You'll Regret Opening Your Second Credit Card Right Away

When most people think of credit cards, debt is probably one of the first things that comes to mind. But credit cards aren't automatically bad. Credit cards enable you to make large purchases you may not have the cash for today, and they can come with valuable rewards too. 

Having multiple cards can help you maximize your rewards, and it's useful to have a backup if one card gets lost or stolen. But if you've just opened your first card, it's probably not a good idea to run out and get a second one right away. Here are three reasons why.

1. It could hurt your credit score

Credit card companies do a hard inquiry on your credit report every time you apply for a new card or loan. This is true whether you open a rewards credit card or a balance transfer card. Each inquiry drops your credit score by a few points. 

Applying for a single card isn't that big of a deal, but these inquiries can stack up over time if you're applying for several cards in a short period. Spacing out your credit card applications can minimize the effect these inquiries have on your score.

2. Your application could be denied

Credit card issuers are wary of those who frequently apply for new credit because it suggests that the person could be living beyond their means. If this is the case, they may have difficulty repaying what they owe. 

To hedge against this concern, issuers might offer you a lower credit limit or even deny your application. Waiting between applications increases the odds you'll get approved, especially if you demonstrate good payment history on your existing card.

3. You need to get used to your first credit card

If you just opened your first credit card, it's good to give yourself some time to get used to charging things to the card and making payments. Ideally, you'd pay your balance in full each month to avoid interest charges. But if this isn't possible, you might be caught off guard by how quickly your balance balloons.

This problem could compound if you have several cards at your disposal. Make sure you're comfortable handling a single card before you open a new one.

How to shop for new credit without hurting your credit score

The general rule of thumb is to wait at least six months after opening a credit card to open another one. This minimizes the number of hard inquiries on your report and may assuage creditor concerns about living beyond your means.

Don't panic if you've broken this rule in the past. You may not have hurt your score that much. A hard inquiry generally knocks a maximum of five points off your credit score, according to myFICO. 

If you need help financing purchases beyond what your credit card allows, you may want to either wait to make the purchase, rely upon existing savings, or look for other ways to increase your income, like starting a side hustle. 

You can apply for new credit too, if you really want to. Just make sure you understand the consequences of doing so and recognize the fact that the lender may deny you if it's concerned about your ability to pay your balance.