How To Manage Multiple Credit Card Accounts

How do you manage multiple credit cards? Do you find it easy or is it a great burden that you already regret owning them?

I have multiple credit card accounts. I know it is not easy to manage them. It’s possible to go overboard on spending as credit is very much available and it’s tempting to buy stuff here and there. In addition, possible missed payments might happen that will greatly affect your credit score.

Personally, I made the mistake in the past of using my cards for unnecessary expenses and as a source of emergency funds. However, I have never missed payment of the minimum amount due. You should move heaven and earth in order to pay the minimum. Missing this payment will greatly hurt your credit score and has negative consequences that you will regret later on.

In this post, I will share with you some strategies to properly deal with having multiple cards. With these strategies, I have paid my dues on time for all those credit cards without missing a single payment. With payment, I am referring to the minimum due or full payment.

Just to be clear, this is not to encourage you to own and manage multiple credit cards. I believe a person should only have 1 or 2 credit cards. Currently, I am in the process of limiting my cards to just 2. I will share this in a post once I made it.

1. Have a proper mindset if you have multiple credit cards

First of all, you should have a proper mindset. The money you spent on your purchases is not yours and it’s on credit. Therefore, you have to pay them and pay them on time as the due date is part of your ‘agreement’ with a card company or a bank.

2. Be mindful of each card’s credit limit

Spending more than the credit limit is very expensive. The fee ranges from Pph500.00 to Php1,000 depending on your card. It’s a good amount of money that you could spend on other purchases or for personal savings.

3. Always pay the total amount due

One way to save money is to avoid charges for balance carried over to the next billing cycle. Credit cards usually charge around 3.5%. If for example, 20,000.00 is not paid on a billing cycle, you will be charged 700.00 and this will be reflected in the next billing statement. This will become more challenging if you own multiple cards.

4. Always pay on time for all your multiple credit cards

Take note of the billing cycle of your credit cards to avoid late payments. Late payment fee is charged when this happens and that’s a waste of money. You may check this post to avoid missing a credit card payment: How to Always Pay your Credit Card Bill on Time.

5. Track your multiple credit card expenses

Monitor the purchases incurred for each of your credit cards to avoid going above your target limit or worse, above the credit limit of your card. For this, you can use a budget tracking app on your smartphone.

Some credit card companies also have features in their apps where the total amount of purchases in a billing cycle and its percentage (based on the total limit) are displayed.

If you’re the type who believes that writing your expenses on paper is the best way to track your credit card expenses, you can use a financial planner. I have done this and it works for me.

6. Assign a credit card for specific purpose or dates

You can assign a card for a specific purpose such as for shopping, groceries, car maintenance/repair/ or for fuel purchases. This will distribute the amount of purchases in your cards. If you’re into collecting points for each card, this is also helpful as you can assign a card to purchases that will reward more points.

Another way of assigning cards is by assigning them based on billing statement dates. This is the strategy that I found very much useful.

The strategy is very simple. I will start to use a card on its billing statement date and stop using it when another card is ready for use. Make sure though that on the statement date, the billing statement is already available.

To illustrate, a person has 3 credit cards and cycle month is January:

• Card 1 (Billing statement date: 1st day of the month)
  • Use this from January 1 to 7
• Card 2 (Billing statement date: 8th day of the month)
  • Use this from January 8 to 16
• Card 3 (Billing statement date: 17th day of the month)
  • Use this from January 17 to 31

Take note though that there are credit cards without a ‘fixed’ billing statement date. This can be moved because of holidays, weekends, new rules, etc.

Final thoughts on managing multiple credit cards

Managing multiple credit cards is not easy and requires discipline. The good news is that it can be done with the strategies discussed above.

Do you have your own strategies in managing multiple credit cards? Kindly share in the comments below. Thanks in advance! It will be greatly appreciated.