Regarding how many credit cards you should have, there is no hard and fast rule. While there isn’t a one-size-fits-all recommendation for how many credit cards you should have, it’s crucial to understand the effects that having several cards can have on your credit. Your CIBIL score calculation is more influenced by how you apply for new credit cards and how you manage them than by the number of cards you have. In light of this, here are some things to think about if you already have several cards or intend to apply for more shortly.
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1: Need to remember several due dates
While having several credit cards might be quite convenient, it can also cause you to lose track of important dates. You assume the additional risk when you use many credit cards since you have to be aware of various terms of service and keep track of numerous bills and due dates. Additionally, when you check CIBIL score by pan card, your credit score might go up or down depending on how you handle crucial aspects of your credit cards, such as paying bills on time or carrying a debt. It could be challenging to remember when each one is due, which raises the possibility that you’ll forget to make a payment which may result in missed or late payments, which will significantly lower your credit score. You could set an alarm for each one of the credit cards that can alert you of your due dates to make your life easier. Alternatively, you might wish to inquire about modifying your due dates with your credit card companies. Bringing all due dates to one day can save you a tonne of money if your issuer permits it.
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Increased credit limit
More cards equal a higher credit limit and multiple credit cards may tempt you to spend more than you can afford to pay back each month. However, as tempting as it must be, it is important to keep track of your spending to avoid overspending, and only borrow as much as you can pay back before interest accrues. Additionally, make sure that you consistently stay between 30 and 50% of your overall credit limit. Defaulting on your credit card payments or paying them late can damage your credit score when you do the CIBIL score calculation.
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Too many credit inquiries
It’s crucial to comprehend the procedure before applying for a new credit card. When you apply, the lender will do a hard inquiry on your credit record. Due to being a hard inquiry, it will appear as a line item on your report as opposed to soft inquiries, which don’t affect your CIBIL score calculation. When you check CIBIL score by pan card, the score may be impacted if you apply for several cards in a short span or if there have been several inquiries in the past year. As a result, before applying, it’s crucial to consider all of your card alternatives and make an informed choice.
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Closing your old credit cards
Your credit score heavily depends on the total length of your credit accounts. Therefore, avoid closing your existing credit cards when you open new ones because doing so can lower your credit CIBIL score calculation.. Instead, keep making minor purchases using your older credit cards because they will establish a solid, reliable history that will eventually help your score to rise. You should refrain from applying for a new credit card if you are unsure of how you are going to use it in the long run.
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You’ll have more credit available to you
The second-most significant component of your credit score is the percentage of available credit that you are utilizing, sometimes referred to as your credit utilization rate or amounts owed. You’ll get a new credit limit for each new card you open, increasing your available credit. If you continue to make the same or similar amount of purchases as you did before you obtained the new card, this can be a wonderful strategy to increase your credit utilization rate and credit score. You run the danger of increasing your utilization and lowering your credit score when you check CIBIL score by pan card. If you use the additional line of credit to make excessive purchases. The great approach for opening many credit cards is to consistently spend 10% of your overall income.
How many credit cards one should have?
Well, nobody is going to be able to tell you how many credit cards you should have. As long as you always make all of your payments on time, keep your balances low, and avoid getting into debt, your credit score is just as excellent with one or two credit cards as it is with five or ten, apply for a new credit card by all means if you like the thought of having more options. Whatever you decide, just make sure you exercise smart financial judgment.
You should focus on the benefits and usage of your credit cards rather than the number of credit cards you have. Consider the advantages, yearly fees, credit limit, and other factors before applying for a new credit card. No matter how many credit cards you own, your credit scores will remain solid as long as you maintain a low credit use ratio and consistently pay your payments on time.
Can having several credit cards raise your score?
Since each credit card has its own credit limit, having several credit cards might increase your overall credit limit. Depending on how much you charge to your cards and how you repay them, having several credit cards may or may not improve your credit score. Having more credit cards can result in a rise in your credit score if you use them responsibly and pay the payments on time and in full each month. It is because having additional credit cards would increase your credit limit. To demonstrate responsible credit management and raise your credit score, experts advise using no more than a modest percentage of your available credit each month, preferably no more than 30%.
Conclusion
If you currently have multiple credit cards, applying for more won’t likely hurt your score when you check CIBIL score by pan card, but you should never apply for too many new cards at once. Too many hard inquiries will arise from applying for too many new credit cards at once, which will lower your credit score immediately. Nevertheless, if you manage your cards wisely, having additional credit cards will allow you to raise your credit limit, which will raise your credit score in turn. Your financial behaviour, or how prudently you use your credit cards, will have a significant impact on your credit report and credit score. No matter how many credit cards you have, you must always pay your bills on time and keep your credit card balances low. Don’t mindlessly apply for new credit cards. Always check CIBIL score by PAN card and report in advance to see if you qualify for that specific credit card or not.