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How to Choose Your Second Credit Card

Loyalty to family and friends matters. Loyalty to your first credit card? Not so much.

About 39% of cardholders reported carrying only one credit cardin a 2016 report from TSYS, a payment processing company.

But you’re not obligated to stick with anycredit card through thick and thin. In fact, you’re probably better off if you don’t. Getting a second card that fits your spending habits can earn you more rewards or save you on interest.

When to apply

There’s no perfect time to apply for a second credit card. As long as getting onewill save you money and you’re not about to apply for a mortgage, you’re probably in the clear.

Butit might be an especially good time to apply if:

- Your credit has improved. You’ll now have access tobetter credit card options.
- Your spending habits have changed. If your card offers bonus rewards only on restaurants, for example, and you no longer dineout often, it might be time for a change.
- You want more rewards or benefits.Two credit cards can get you more perks than one.
- You’re carrying high-interest debt. Moving your debt to a balance transfer card can save you money on interest.

To be sure, doubling up on your plastic won’t help in every case. If you already have trouble controlling your credit card spending or managing youraccount, opening another cardwill just add to yourproblems. But if you think a new card could benefityour bottom line, start looking.

What to look for

Getting a second card that complements your spending habits is key.

If you plan on carrying debt, find a card that minimizes the costs of doing so. Look for onewith:

- 0%introductory APR. Some 0% annual percentage rate periods stretch foras long as 21 months. If you’re transferring a balance, try to skip the balance transfer fee, too.
- No annual fee. If you have decent credit,you’ll findplenty of no-fee options.

If you plan to pay in full every month, your interest rate won’t matter.Instead, look for a card with:

- High ongoing rewards, such as1.5% or 2% back on every purchase. If you already have one of these cards, sign up foronethat offers tiered rewards — that is, higher rewards ratesin certain categories.
- Rewards that fit your spending. If you’re always on the road, get a travel cardthat gives you points or miles. If you aren’t, go for one withcash back.
- Side benefits. If you’re a frequent traveler, a card that providesfree checked bags or allows you to avoid foreign transaction fees could save you money.

Finally,keeping your first credit card openwill generally improveyour credit. But if you aren’t using thatcard and it charges an annual fee, or if it’s a secured card and you wantyour deposit back, ask your issuer about converting it to a no-fee or an unsecured card. If those aren’t options, close it.

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Let us be your guide. ","formlayout":"top_aligned","formtemplate":"","evalequations":1,"autocomplete":1},"formid":"cp_calculatedfieldsf_pform_1","setCache":false,"cache":false}]; Should you get a third credit card? … And a fourth?Two credit cards might be better than one. And a third canboost your rewards rates further. But spreadingyour purchases over, say, 10 cards? It might not hurt you, but it probably won’t help you much, either — at least not in the long run.The more cards you have, the greater chance there is that their core benefits will overlap. And applying for cards to get their sign-up bonuses and closing them afterward might help you rack up rewards, but using a patchwork of different cards on an ongoing basis probably won’t. As your collection grows, multiple annual fees could eat away at your rewards, and your wallet couldbecome more difficult to manage.Keepyour credit card collection a lean, mean, benefit-generatingmachine. Choosing a second card that’s worthy of a space in your wallet is a great place to start.Claire Tsosieis a staff writer at NerdWallet, a personal finance website. Email:claire@nerdwallet.com. Twitter:@ideclaire7.The article How to Choose Your Second Credit Card originally appeared on NerdWallet.


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