5 of the Biggest Mistakes You Can Make With Multiple Credit Cards
by Lyle Daly | Published on Sept. 27, 2021
If you plan to carry a few credit cards, watch out for these common mistakes.
It's not right for everyone, but I'm a fan of using multiple credit cards. Different cards have different perks, such as big bonuses for new cardholders and extra rewards in certain spending categories. By getting multiple cards, you can use the benefits you like.
However, when you have more than one card, there are more ways things can go wrong. Here are the mistakes to avoid so all those credit cards don't end up costing you.
1. Missing payments
Every credit card you have means another bill to keep track of. This can be tricky, especially if the due dates for your cards are spread all over the month. If you have credit card payments due on several days, it's easy for one of those to slip your mind.
Late payment fees can be costly, so here are a few simple ways to ensure you never miss a credit card payment:
- Set up automatic payments. This is the best way to avoid missed payments, as long as you always have enough money in your bank account to cover all the credit card bills.
- Create monthly payment reminders on your phone or computer.
- If you can, get the same payment due date on all your credit cards. Many card issuers let you choose your card's due date.
2. Paying too many annual fees
Credit cards with annual fees tend to have more perks, so they can be a great value. But the annual fee is usually only worth it if you use the card often. That's harder when you have several cards you use regularly.
For most people, it doesn't make sense to pay an annual fee on more than one or two credit cards. If you have cards with annual fees, compare how much value you get from them to how much they cost you. Depending on what you find, you might want to downgrade a credit card to a no-annual-fee alternative.
3. Not spending enough for a bonus
Sign-up bonuses are one of the best reasons to open multiple credit cards. A sign-up bonus is an offer available to new cardholders. For example, a card may offer 80,000 points for spending $4,000 in three months. Offers like these can be extremely valuable, as they give you a fast way to earn lots of rewards.
These offers almost always have spending requirements, as in that example above. And if you don't reach the spending requirement, you miss out on the bonus rewards.
Keep track of how much you spend, so that this doesn't happen to you. Many card issuers offer bonus trackers online. Even if yours doesn't, you can contact the card issuer to see how much you've spent towards a bonus.
Also be careful about opening multiple credit cards around the same time. You don't want to have trouble earning bonuses because you're juggling spending requirements.
4. Using the wrong card for a purchase
Many rewards credit cards earn different amounts depending on the type of purchase you make. One card could earn 4% on dining and 1% on other purchases, whereas another could earn 3% on groceries and 1% on your other purchases. If you mix up which is which, you get less back on your spending.
That's a straightforward example, but it can be much more complicated -- some cards have several bonus categories, so there's more to remember when you choose a card during checkout.
It may help to keep a note on your phone with your credit cards and their bonus categories.
5. Spending more than normal
One of the biggest risks with credit cards is that they make it easy to spend money. If your card's credit limit is high enough, you can buy what you want, and it doesn't matter if you actually have the money in your bank account, or if the purchase fits your budget.
The temptation to overspend can get even worse when you have more credit cards and more available credit.
Following a budget is a great way to keep your spending in check. Set a limit on what you can spend each month so you're not going by how high your credit limits are. If this has been hard for you in the past, there are several useful budgeting apps that can help.
You can come out ahead by using multiple credit cards, but there's a learning curve. If you're considering adding more cards to your wallet, remember to take it slowly and avoid expensive mistakes.
Top credit card wipes out interest until 2024
If you have credit card debt, transferring it to this top balance transfer card secures you a 0% intro APR for up to 21 months! Plus, you'll pay no annual fee. Those are just a few reasons why our experts rate this card as a top pick to help get control of your debt. Read our full review for free and apply in just 2 minutes.
About the Author
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.