SG Budget Babe
Asked on 21 Feb 2020
How do you know if you have too many credit cards? What's the most advantageous way to maximise your credit card usage such that you can get the best bang for your buck?
YES - primarily when it becomes:
Too overwhelming to track
Under-utilised cards leading to fees at the end of the year
It's important to be fully on top of your spending, whilst you max out the points/cashback/miles.
Hey Dion, a good indication for me when i have too many credit cards is when it becomes a hassle to keep track of the credit card bills to be paid every month. A good practice is also to try and align your billing cycle for all your credit cards at the beginning or end of the month so that you won't forget to pay them.
Unless you have a bunch of expenses to play with, i will assume the average person will only really use 2-3 cards max.
Personally I will not be able to keep track of so many credit cards, not to mention the ever changing T&C as well.
I used to have many cc too, and I cancelled most of them as my banker advise me that every cc contribute to your loan commitment, and it will affect my mortgage loan ability.
Now I left with 2 or 3 max.
I apply for a CC card mainly for 3 things: 1) There's a very attractive reward that comes with applying (like the Citi Cashback+) or 2) The card gives the best cashback based on my spending habits (I'm team cashback) or 3) I need the card to fulfill CC spend on my HISA
I applied for UOB One to use to pay for my wedding banquet, DBS Live Fresh for DBS Multiplier and SC and Citi unlimited cashback cards as a general spend card.
Other than that, I try not to have too many cards in case it gets too difficult to keep track in terms of payment or deciding which card to use.
1.If it dilute your spending across all cards, and as a result unable to max out each individual cards' rewards
Incur & unable to waive off annual fees for all cards
Its not the number of credit cards you have, but your credit score that matters at times
It depends on individual preferences and spending habits.
Personally, I use only three credit cards - one for cashback, one for miles, and one for petrol.
If you love travelling and don't mind delayed gratification, then go for miles card. Additionally, some miles cards allow you to pay for your purchases by using the miles (more often than not, it is not worth it). As as result, the card is highly specialised for travel usage.
On the other hand, if you prefer money and instant gratification, then go for cashback card. In essence, it works as simply as it should be - you spend money, and you receive a percentage back. As usual, the more you spend, the more cashback you get in return as well (not just limited to miles card).
Personally, I rank cashback over miles (despite the fact that I travel quite a bit). And I own both cards (cashback and miles) as part of my budgeting and accounting - each card serves different purposes.
As a result, anything more than this is too much of a waste of space in my opinion.
Here is everything about me and what I do best.
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