Having more than one credit card can be good or bad depending on your ability to make repayments on time and the percentage of credit you use. If you know how to handle multiple credit cards correctly, it can positively impact your credit score and help earn more rewards.
Applying for more than one credit card is tempting, but before going ahead, you should know how having multiple credit cards can affect you and your credit score. Scroll down to find out more.
Coming up next
- How many credit cards can I have?
- Is it a good idea to have multiple credit cards?
- How does applying for multiple credit cards affect my credit score?
- What should I do before applying for a credit card?
- What can I do to improve my chances of getting approved for a credit card?
- What is the ideal time between credit card applications?
- Final thoughts
How many credit cards can I have?
There really is no limit to how many credit cards you’re able to have at the same time. Depending on your ability to make repayments and your credit card usage, having multiple credit cards can be a good or bad thing.
If you’re having problems making your repayments on time and you use a high percentage of your credit card limit, this will negatively impact your credit score. But if you make repayments on time and only use a small percentage of your credit limit, then this will cause your credit score to increase over time.
Is it a good idea to have multiple credit cards?
Depending on your situation, having multiple credit cards open at the same time can be positive or negative.
- Having multiple credit cards can positively impact your credit score if you make an effort to pay all your repayments on time and only use a small amount of your available credit limit.
- If you can handle multiple repayments, having multiple credit cards shouldn’t be a problem.
- Using a lot of your available credit can cause your credit score to decrease and may show up as a red flag for future lenders.
- There are risks to having more than one credit card, such as the possibility of overspending and not being able to repay what you owe on time. You also spend more on interest charges and fees.
How does applying for multiple credit cards affect my credit score?
Applying for multiple credit cards at once can negatively impact your credit score. When you apply for a credit card, financial institutions have to look at your credit score to see if you’re eligible for approval.
When lenders do this, it is considered a hard enquiry. Too many hard enquiries around the same time can negatively impact your credit score and be a red flag to financial institutions, decreasing your odds of being approved for future loans or credit cards.
What should I do before applying for a credit card?
Applying for credit cards can negatively impact your credit score, so if you apply without knowing your approval odds, you can be denied and have a few points deducted from your score. Here are a few things you should do before applying for a credit card.
- Know what your needs are. Before applying for a credit card, decide what it is you need. Decide if you want a card with rewards, cashback on what you spend, or a basic cards that's free to keep open for emergencies.
- Learn the jargon. You should know what you are signing up for in advance, so it's important to know how things like annual fees, balance transfers, earn rates, and late fees work. Knowing what these terms mean will make it much easier to compare offers.
- Compare credit cards. Once you’ve done your research, you can compare different credit cards using a website like Finty, where you can compare various credit cards side-by-side.
First time applying for a credit card? Check out our complete guide to credit card applications?
What can I do to improve my chances of getting approved for a credit card?
Now that you know what type of credit card you’re looking for, here are a few things you can do to improve your chances of approval.
- Make sure you meet the eligibility requirements. Once you find a credit card you’re interested in, you can look at the eligibility requirements and see what your approval odds are. Most credit cards require you to have a good credit score, be 18 years or older, be a permanent Australian resident, and be able to show proof of income.
- Make your repayments on time. Before applying for a new credit card, make sure you’re making all your repayments on time. Missed repayments will show up on your credit report.
- Don’t overspend. Overspending can look bad to future lenders and impact on your chances of approval.
What is the ideal time between credit card applications?
The ideal time to wait between credit card applications depends on your credit history and current financial situation.
If you’re set on having multiple credit cards, it’s best to wait at least six months between applications. Sending in numerous credit card applications in a short amount of time can damage your credit rating. Instead of applying for more than one credit card, try finding a credit card that offers a larger credit limit or a sign on bonus that you are eligible for.
Final thoughts
If you’re thinking about applying for more than one credit card, it may be best to wait between applications. You can have multiple credit cards without damaging your credit rating as long as you can make repayments on time and keep your credit utilisation low.
