15 November 2007

Many people have a credit card and use it for everything from day to day expenses to booking flights, accommodation, hiring cars, purchasing clothes, gifts and even taking out cash advances.

Is one credit card enough to do all that?

Having a second credit card gives the majority of consumers an advantage. Firstly, and most importantly, a second credit card should be one that suits your particular financial situation.

Using your credit card properly allows you take advantage of the benefits that credit card companies attach to their credit cards.

If you have chosen the right type of rewards program for your financial situation then you will reap the benefits of paying less interest, getting a cashback reward or simply earning valuable rewards points.

Not every rewards program suits all individuals.

A rewards program such as frequent flyer points is completely useless if you only use a credit card on rare occasions while someone who uses their credit card for all their purchases and then transfers money between accounts to save on fees and charges, will benefit by amassing many rewards points which they can use to save money on flights, accommodation or whatever else they need.

But why have a second credit card?

There are times when an unexpected bill will pop up, whether it be car repairs or a medical emergency where you may be left short of cash between paydays.

It may be a better option to charge a bill to a credit card, enjoy the 55 days interest free, and make your payment on your next payday rather than struggle to get through because you have paid your bill in full when you couldn't really afford it.

You may also find that the best feature of a credit card is the 55 days free interest term associated with the majority of credit cards (for purchases only - cash advances are charged interest immediately), there may be times when you are short of cash and need to make your credit card payment to ensure you get your 55 days free interest.

A second low interest charging credit card can be a useful tool in ensuring that you always receive your 55 days of free interest on your credit card.

Can I have more than two credit cards?

Certainly.

But again, not every credit card suits all individuals. In the lead up to Christmas there are several new credit card products on the market that offer lower than usual interest rates on credit card purchases made.

This can be a good time to get a second or third credit card to take advantage of these features rather than pay the larger rate of interest on your current card.

Visit the Credit Card Comparison Chart to find the best credit card deals available

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