How to Choose The Best Second Credit Card?

Getting a second credit card can bring you more purchasing power, access to better rewards and increase your credit score. However, it also has its disadvantages. In this article, we’ll explain how to choose the best second credit card as well as the pros and cons of getting a second credit card.

The benefits and disadvantages of getting a second credit card

A second credit card can be a smart decision, but it can also introduce some additional risks and costs. Let’s quickly summarize the main benefits and disadvantages of getting a second credit card.

How to choose the best second credit card for you

When choosing a second credit card, the first thing to look for is whether you can get a better credit card than your first one. If your credit score has increased since you got your first credit card, you might be able to access a credit card with higher limits, better rewards, extended warranties and other perks. 

Another thing to consider is credit cards that offer higher cashback or other rewards for purchases that you make very often. There are credit cards focused on specific types of purchases of purchases, such as travel, groceries or dining. 

For example, if you travel a lot but your current credit card doesn’t offer any extra perks for travel-related purchases, a second credit card might offer you significant benefits. Here are some examples of the credit cards that can be a good choice if you’re spending a lot on a particular category of purchases. 

• Groceries: American Express Blue Cash Preferred
• Dining: Chase Sapphire Preferred 
• Travel: Capital One Venture Rewards
• Gas: Bank of America Customized Cash Rewards 
• General cashback rewards: Wells Fargo Active Cash

What to keep in mind before choosing your second credit card

Before pulling the trigger on your second credit card, here are some key things to remember.

• Check your credit score: Before applying for a second credit card, check your credit score to know where you stand and which credit cards you can apply for.
• Check if you can get pre-approved for the credit card you’re considering: A hard inquiry (also known as a “hard pull”) into your credit can slightly lower your credit score. To avoid this, check if the credit card you’re interested in offers a pre-approval check that has no impact to your credit score. 
• Consider the card’s fees: A credit card might seem like a compelling option at first glance, but could have high fees. Some of the common types of credit card fees include annual fees, interest charges, late payment fees, balance transfer fees, cash advance fees, and foreign transaction fees.
• Don’t skip the details: Read the terms and conditions for the credit card you’re looking to apply for to understand exactly what you’re getting into.
• Time between credit card applications: Applying for multiple credit cards in a short period of time can negatively impact your credit score. Ideally, you should wait at least six months before each credit card application. In other words, if you’ve had your first credit card for less than six months, you should wait before applying for a second one.

When is getting a second credit card a good idea?

Let’s briefly take a look at some common scenarios where getting a second credit card is worth considering.

You want to increase your credit score

The reason why a second credit card can improve your credit score is because it can improve your credit utilization rate. If you open an additional credit account, the total credit available to you will increase. If you spend responsibly, this can allow you to bring your credit utilization rate down. As a general rule, it’s good to keep your credit utilization rate under 30%. 

Your first credit card no longer makes sense for your spending habits

Certain credit cards are optimized for particular types of purchases. For example, if your first credit card doesn’t offer good perks for travel-related purchases, you might be able to get a considerable benefit from getting a second credit card that offers better cashback on travel purchases, points and miles incentives. If you’re interested in learning more, make sure to check out our list of the best no-annual-fee travel credit cards.

Your credit score has improved and you can now access better credit cards

If your credit score has increased since you got your first credit card, you might now be eligible for better credit cards. However, you should make sure that at least six months has passed since you applied for your first credit card before applying for a new one to avoid hurting your credit score.  

When should you avoid getting a second credit card?

While getting a second credit card can certainly be beneficial, it’s not for everyone. If the following describes your situation, it’s probably not the best idea to get a second credit card.

You’re not sure if you’ll be able to manage multiple credit cards

Getting a second credit card will introduce some additional complexity into your personal finances. You’ll need to track additional fees, interest charges and make sure that you make your payments on time to avoid lowering your credit score and paying extra fees. Different cards might have different due dates, which can make staying on top of your payments a hassle.  

You are struggling to pay off your current credit card or have a tendency to overspend

If you are struggling to pay off your current credit card, getting a second credit card is not a good idea as it could potentially sink you deeper into debt.

Getting a second credit card will increase your purchasing power. This can be a pitfall if you have a tendency to overspend. Before opting for a second credit card, it’s important to make sure that you are disciplined and consistent when it comes to your personal finances.

The bottom line

Getting a second credit card can be a great move if you pick the right credit card for your needs and you can stay on top of all your payments. It can even help boost your credit score, which will make your life easier down the road. However, if you are already struggling to pay off your first credit card, getting a second credit card is not a very wise decision.

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