Multiple credit cards
There are a number of reasons why some people may have multiple credit cards, but sometimes having more a number of credit cards can have its disadvantages. Some effects include:
- You pay more. If you have more than one credit card, you are usually paying annual fees for each card, meaning that you could be paying double or triple the amount in fees. Also depending on how many cards you have and what the balance outstanding is for each, you are being charged interest three times, on the balance of each card.
- Lose control. Just by having more than one credit card it makes it harder for you to get your debt under control and pay it all off. Some people struggle to pay off one card let alone two or three.
- Can affect your credit rating. Each time that you apply for a new credit card, your credit file is marked. If you decide to apply for a loan such as a home loan in the near future, it could affect this.
- Consolidate. Consider consolidating your multiple credit cards and transferring the balances onto one card with a balance transfer. Balance transfer cards are a great way to focus on paying off your debt without paying a higher interest rate. They usually offer a low or no interest for a certain period, such as zero percent for six months. Compare balance transfer credit cards online and see how much you can save. Alternatively check out the table below for some balance transfer cards currently available.
- Pay down your debts. It may be necessary to set yourself a budget to work out how much you can afford to pay off your credit cards each month. Whether you decide to take out a balance transfer card or not work on paying off your card/s as soon as you can and save yourself in interest at the same time.
- Pay more than the minimum. If you can't pay off the total outstanding balance each month try to pay more than the minimum repayment required in order to pay it off sooner rather than later. Generally the minimum repayment is approximately 2 percent of the total balance, so if you only paid this each month it could take you years to pay off.