credit cards

3 Reasons You Always Need 2 Credit Cards


If you’re an avid reader of personal finance articles and blogs you’ve probably read about healthy credit card habits.  Some people feel that you should only have one credit card because that’s really all you need.  Having one credit card with a reasonable limit (under $5000) also helps avoid any temptation to spend and ultimately helps people steer clear of accumulating a lot of debt.

I think that’s good advice for the latter two reasons, but there are also several good reasons why everyone should have more than one credit card.

In case one gets stolen

If you only have one credit card and it gets stolen what do you do?  Some would say, well you just wait for the new one to come in the mail.  That’s a good point, but what if you’re travelling before the new one arrives.  I’ll tell you what happens – you’re stuck.

This is the exact situation I’m in right now.  My credit card had fraud and therefore it was closed.  I am currently waiting for the new one to arrive in the mail, but in the meantime I am leaving tomorrow for a four day business trip. Thank goodness I have a back up credit card that I stow away for this exact reason, but if I didn’t I’d be in a lot of trouble.

To take advantage of different benefits

It’s very rare that one credit card will be able to offer all the benefits you need and want.  Some offer great travel rewards, some offer cash back and others offer extended warranties and insurance.  That’s why it’s good to have more than one credit card – to make sure you’re maximizing all the benefits you can.

I am by no means saying you should have five different credit cards, but having two is enough to have well rounded benefit rewards.

A drinking credit card

This is another way of saying one card with a lower limit that you can use for everyday purchases to keep your credit score in good standing.  It may only have a $500 or $1000 limit so you can’t get into too much debt trouble whenever you get the urge to spend.

It is also a credit card you can use for nights out on the town or online purchases.  If it gets frauded or stolen the damage won’t be too extensive because the limit is low and you have your second card as a backup.  It’s a great way to protect yourself in case something bad happens.

I actually never thought of this until one of my clients brought it up.  He is an accountant who made well into six figures every year.  I asked him why he had a gold card with a $10,000 limit and a regular no fee card with a $1,000 limit.  “It’s my drinking card” he said.  “It has a low limit in case I forget it somewhere or lose it.”  He uses the gold card for big purchases and travel.  It sounds funny but it’s actually a brilliant strategy.

Photo from I’d Pin That

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