In October 2019, total US credit card debt reached $1.088 trillion. That's an average of $8,500 per household. To better manage credit card debt, many consumers sign up for a second card, which can provide several key benefits.
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Since all credit cards can carry balances and accrue interest, it’s important to identify the specific benefits of taking out a second card. Here are some examples to consider, before opening a new line of credit.
As referenced above, many consumers carry high balances on their credit cards; according to USA Today, the average American has a $6,354 card balance. Signing up for certain new cards allows people with credit debt to take advantage of balance transfers, from cards with high APRs to ones that may offer lower or limited time 0% interest. When the balance is transferred to a card with a lower or 0% interest rate, it can help stop the bleeding via lower monthly payments.
While managing credit card debt is of utmost importance, another advantage of acquiring a second card is greater purchasing power. By opening a new credit line, a consumer has access to more funds for urgent necessities or expenses. Moreover, a consumer who pays their first card’s monthly balance on time can become eligible for an increased credit line on their second card. Having more total credit can also raise one’s credit score, as long as monthly balances are consistently paid off.
Earn More Rewards
When obtaining a second credit card from the same issuer, or a different one, it will open up the opportunity for different and expanded rewards offers. Benefits such as airline miles or cash back can differ from card, while some issuers allow for certain rewards points to be combined.
No matter the specific reason, signing up for an additional credit card can provide great financial benefits, as long as you’re able to manage multiple balances in a responsible and timely manner. If you’re interested in obtaining a new credit line, Fiona can help you get matched with personalized credit card offers.