Six ways to make the most of your multiple credit cards

Many credit card users avoid applying for additional cards owing to the fear of higher spending and subsequently falling into a debt trap. However, irrespective of the number of cards you have, the chances of falling into a debt trap primarily depends on your financial discipline and repayment behaviour.

Listed below are 6 ways to manage and make most of multiple credit cards:

Maximise card benefits

Credit card issuers offer cash backs, reward point programs and other benefits based on target consumer segments. For example, travel credit cards offer higher benefits such as free air miles, free lounge access, etc on travel related spends while fuel credit cards provide higher benefits on fuel linked spends. Thus, those having multiple credit cards can accrue higher benefits by spreading their transactions across different credit cards based on reward point structures, cash back offers and other card benefits.

Spread your spends based on your interest free period

The interest free period of credit card transaction refers to the time period between its transaction date and the due date of repaying bill as per billing cycle. Credit card issuers do not charge interest during the interest free period, except cash withdrawals, as long as one repays his entire credit card bill by the due date. The interest free period can range anywhere from 18 to 55 days depending on the card issuer and the credit card transaction date. Those having multiple credit cards can make the most of their interest free period by spreading their big ticket spends across various credit cards based on their residual interest free period.

Redeem reward points before expiry

The chance of not redeeming reward points nearing their expiry are usually high among cardholders having multiple credit cards. Hence, credit card users should check their reward point expiry date. They must also keep a close watch on the reward point catalogue of card issuers. The reward points nearing their expiry can be used to buy merchandise, vouchers, etc from the partner merchants stated in the reward catalogue. Remember that many credit cards allow using accumulated reward points to be adjusted against their outstanding bills.

Make the most of reward points

Many credit card issuers cap credit card reward points to be earned in a single billing cycle. Hence, those having multiple credit cards should route their transactions to other credit cards once they reach the reward point cap on their primary card.

Use it as backup

In the case of loss or theft of credit card, it usually takes a few days for the card issuer to send you a replacement card. In such cases, those having single credit cards would be forced to use their debit card or other instrument for their regular spends. On the other hand, those with multiple credit cards would be able to route their credit card spends through other credit cards and thereby, keep their liquidity intact.

Compare EMI options

Credit card issuers enter into partnership with manufacturers, merchants and service providers to provide no cost EMI offers on select products/services. The interest cost of EMIs in the no-cost EMI offers are borne by the merchants. Credit cardholders have to repay the purchase price in the form of EMIs. However, the credit card users will incur the GST levied on EMI’s interest component.

Credit card issuers also provide additional discounts to their card users on choosing no-cost EMI options on select transactions. Hence, those having multiple credit cards should enquire with the merchants or service provider regarding the availability of no cost EMI option on their various cards before making any big-ticket purchase.

(The author is Associate Director & Head of Credit Cards, Paisabazaar.com; views expressed are personal)