It can be surprisingly easy to max out our credit cards and then find that we do not have enough money to buy things that we want to. Or we may find that we have a credit limit that is so small that it is not enough to buy everything that we want. It can therefore seem like the natural thing to do – to get a second card. However, it is worth making sure you have a good think about this idea and check that it is the right thing to do before you do it. You may otherwise regret your choice.
Will it Encourage Overspending?
It is good to start by considering whether you will find that the card might encourage you to overspend. If we have access to lots of money then there will always be a temptation to spend it. Some people are very well disciplined and will use it very sensibly, but others find it much harder. It is a good idea to think about which category you fall into and whether it is likely that you will struggle to resist using the cards to treat yourself to things or whether you are sure that you will be able to restrain yourself. You should be able to think about what you have been like in the past and base your decision on that. Perhaps think about whether you have previously managed to have a credit card and be sensible with it, you already have one so consider what you are like with that and how you think you might be with another one.
It is also worth thinking about the repayment of the card. It is easy to forget about this with a credit card because they do not need to be repaid quickly. You will get a statement and have the option of just repaying a minimum amount and if you do this, then you will repay the interest and often just a very small amount of what you owe. This means that it can take a very long time to repay the debt and you will keep paying interest on it. This can add up to be very expensive, but it is hard to see that impact as you just see the monthly interest amount and you may not even take that much notice of it. Therefore, it is wise to actually calculate how much that is for a year and that may motivate you to repay more. Many people set up their credit cards so that the full balance owed is repaid in full each month. You can set up a direct debit to do this and this can be a better idea as it means that you will not have to pay any interest at all. However, you will need to make sure that you have enough money to do this and so you will need to keep a close check on what you are buying with your card so that you are sure that you are not spending more than you can afford to repay. With two cards this could be difficult to track and you may also find that you will have access to more credit than you can possibly repay in one go.
Credit Report Impact
It is also worth considering the impact that having two credit cards will have on your credit report. It will make it look like you have a need to borrow lots of money and this will not necessarily look good to anyone looking at your credit report. The type of people looking will be potential lenders or landlords and this might mean that you will need to consider whether this is something you want. If you are looking to rent or to borrow more money, then this could have an impact.