Should I get a second credit card?

[Syko Nachoman]

So I got an offer for a second credit card in the mail recently, and I've been wondering whether I should accept it. I have until the end of July to decide. After scouring the internet for information about whether it would be a good idea or not, I have come up with this list of pros and cons:

Pros:
1. It's good to have a second credit card as a backup, in case your main credit card gets lost/temporarily disabled for whatever reason.
2. In the long run, your credit score will increase because your credit line essentially doubles. I don't use my current card for much and my balance never goes above maybe 20% of my credit limit, but still, it would be nice in case I someday need to buy an expensive appliance or something.
3. There's the possibility of earning even more reward points if I buy things with it (it is a rewards card, although I haven't looked deeply into the details yet). This isn't something I care too much about, but it is a perk.

Cons:
1. I already have my main credit card associated with everything, so I might forget to even use the second card and then the account might get closed for inactivity or something? I dunno. I'm thinking a good way to split it could be to continue using my main card for online purchases, but then start using the new card for brick-and-mortar transactions (buying stuff from the supermarket, etc.).
2. In the short term, getting a second credit card apparently makes your credit score go down a little bit because it decreases the average age of your credit accounts (which for me would be about 15 years, currently). This is supposedly bad if you're planning to buy a house in the next 12 months, and, as luck would have it, I have been looking into the possibility of moving to a new house soon.
3. To get it activated, I would have to talk to people over the phone *shudder* OK maybe that one's not such a big deal

Anyway, I'm not sure whether the pros outweigh the cons or not, so I figured I'd poll GT. I don't necessarily need a second credit card, but if it's beneficial in the long run, then maybe it would be nice to have one. If you were in my situation, would you apply for it?

[wildmaven]

After one of our credit cards got skimmed at a gas station and we had to cancel the card and wait for a new one to arrive, it sure was nice to have a backup from a different bank.

However, only you know if you have the willpower to not overspend.

[User 180565 is taking donation]

I'd be careful with those, high aprs are a thing and really you should be asking yourself if you can manage it not us. My rule of thumb is never open a credit card you can't pay off or you better be sure you have the money in the bank to be able to pay it off. I'd call companies and ask them to give you a specific break downs on how payments work in English if you don't understand bank abbreviations or how they work. Ask about APR amounts as well as any late fees that may follow. I get it not all of us can pay on time which is why their needs to be a proper understanding from said bank.

I recently opened a Amazon debit card just to build up my credit but I'm not out buying expensive items with it. I'm doing low $25 per 6 months payments so it's not a huge amount lost every month.

[Syko Nachoman]

Jun 30, 2023 15:45:08 GMT -8 wildmaven said:

After one of our credit cards got skimmed at a gas station and we had to cancel the card and wait for a new one to arrive, it sure was nice to have a backup from a different bank.

However, only you know if you have the willpower to not overspend.

That's helpful to know. Come to think of it, I had a similar experience when my previous card was being renewed -- they were supposed to automatically send me the new card in the mail, but it never arrived. When I called the company to let them know I never got the replacement card, they had to cancel my old number and send me a new card with a new number for security reasons. That meant that for a few days, I wasn't able to charge anything to my account. Thankfully this happened during a time when I didn't need to buy anything, so it didn't really cause any issues, aside from the need to update all my credit card info on a bunch of websites when the new card arrived.

Jun 30, 2023 17:58:28 GMT -8 User 180565 is taking donation said:

I'd be careful with those, high aprs are a thing and really you should be asking yourself if you can manage it not us. My rule of thumb is never open a credit card you can't pay off or you better be sure you have the money in the bank to be able to pay it off. I'd call companies and ask them to give you a specific break downs on how payments work in English if you don't understand bank abbreviations or how they work. Ask about APR amounts as well as any late fees that may follow. I get it not all of us can pay on time which is why their needs to be a proper understanding from said bank.

I recently opened a Amazon debit card just to build up my credit but I'm not out buying expensive items with it. I'm doing low $25 per 6 months payments so it's not a huge amount lost every month.

This shouldn't be an issue for me. I've been using my current credit card for over a decade, and I've never missed a payment or had to pay any fees. I've got autopay set up, and I usually do another payoff of my balance in the middle of every month just for the sake of keeping my balance as low as I can.

[wildmaven]

Also, as User 180565 is taking donation briefly mentioned, if you're going to hold a balance on any credit card, know what the % is that they charge. You could be losing a lot of money. You said that you never go over 20% of your credit limit, but if your credit limit is $20,000 then that 20% is $4,000 in debt. Say that $4000 is being charged at an annual rate of 25%, then that's $1000 extra per year that you're paying, and that 25% is being compounded (meaning that they're charging interest on the interest that you owe if you're not staying ahead, meaning you have to pay more than the minimum just to get ahead).

What's a good APR? Read this: www.lendingtree.com/credit-cards/articles/apr-ranges-explained/

[Syko Nachoman]

Jul 1, 2023 16:46:29 GMT -8 wildmaven said:

Also, as User 180565 is taking donation briefly mentioned, if you're going to hold a balance on any credit card, know what the % is that they charge. You could be losing a lot of money. You said that you never go over 20% of your credit limit, but if your credit limit is $20,000 then that 20% is $4,000 in debt. Say that $4000 is being charged at an annual rate of 25%, then that's $1000 extra per year that you're paying, and that 25% is being compounded (meaning that they're charging interest on the interest that you owe if you're not staying ahead, meaning you have to pay more than the minimum just to get ahead).

What's a good APR? Read this: www.lendingtree.com/credit-cards/articles/apr-ranges-explained/

I've always paid my balance in full by the due date, so I've never been charged interest. This is after more than a decade of using the card. Is the APR important if you never carry a balance beyond the due date? The offer I received has an introductory APR of 0% for 15 months, but then it increases to 17-29% (depending on various factors) after that point.

[wildmaven]

Jul 1, 2023 17:14:22 GMT -8 Syko Nachoman said:

Jul 1, 2023 16:46:29 GMT -8 wildmaven said:

Also, as User 180565 is taking donation briefly mentioned, if you're going to hold a balance on any credit card, know what the % is that they charge. You could be losing a lot of money. You said that you never go over 20% of your credit limit, but if your credit limit is $20,000 then that 20% is $4,000 in debt. Say that $4000 is being charged at an annual rate of 25%, then that's $1000 extra per year that you're paying, and that 25% is being compounded (meaning that they're charging interest on the interest that you owe if you're not staying ahead, meaning you have to pay more than the minimum just to get ahead).

What's a good APR? Read this: www.lendingtree.com/credit-cards/articles/apr-ranges-explained/

I've always paid my balance in full by the due date, so I've never been charged interest. This is after more than a decade of using the card. Is the APR important if you never carry a balance beyond the due date? The offer I received has an introductory APR of 0% for 15 months, but then it increases to 17-29% (depending on various factors) after that point.

Ahhhhhhhhhhh, I misunderstood. I was going by what you said earlier:

Jul 1, 2023 6:08:53 GMT -8 Syko Nachoman said:

I usually do another payoff of my balance in the middle of every month just for the sake of keeping my balance as low as I can.

Which I took to mean that you carried a balance, not paid it off every month.

[User 180565 is taking donation]

I'd honestly look into a credit union than some flyer you might have gotten in the mail stating hey we're giving out free $500 if you join. Credit unions are often way more willing to work with you than some standard off the shelf type of bank. Unless you don't have any in the area which is understandable. My bank spoils me basically I'm allowed to take loans out on my own money and pay myself back over time with potential to double the MSRP of what I purchased my item for depending on how my savings go of course. Double as in giving me time to double the amount I had in the bank for it.

[Artemis]

If you always pay the balance, I'd go for it. The overall improvements to your score are nice, especially since some of the best cards need a high score. Having a rewards card is nice, too. My "main" card is a solid cash back card and I just put all my monthly bills on it and let that accumulate, but some are better for other purposes like travel or have specials like higher % back on certain purchases during parts of the year. It's more important if you have more to spend, but overall I'd say the pros outweigh the cons.

I'm not sure if all credit cards now have this, but I also like the ability to get a virtual card number, which is basically like getting a separate credit card number for the same account. I can use that in specific instances, and if anything goes wrong all I have to do is cancel the virtual number rather than getting an entirely new card. I think different providers will have different features like that which are worth looking into and it's worth shopping around a little.

tl;dr yes

[hamidch]

In evaluating whether to get a second credit card, consider the potential benefits of having a backup card in case of emergencies, the long-term advantage of increasing your credit line and score, and the possibility of earning additional rewards. However, weigh these against the cons, such as the risk of forgetting to use the second card and potential account closure, a temporary decrease in your credit score, and the inconvenience of activating it over the phone.

Assess your personal financial habits and needs to determine if the advantages of a second credit card align with your goals. If the benefits outweigh the drawbacks and align with your financial strategy, applying for the second card may be a reasonable option.