5 Secrets to Successfully Manage Multiple Credit Cards

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Credit cards are powerful financial tools when used properly. Here are some tips to simplify using multiple cards and save money in the process.

1 . Only spend what you can afford to pay off monthly

5 Secrets to Successfully Manage Multiple Credit CardsJust because you are using plastic does not mean you should overspend or buy things you cannot afford. Instead, develop your budget with a keen eye toward what you can charge each month and do not exceed it. Carrying balances on your cards can cost you more because of interest charges and makes it harder to pay off your balances.

2 . Know your credit card details

5 Secrets to Successfully Manage Multiple Credit CardsTrack the details for each of your cards – especially the terms and the credit limits on each one. Knowing these details helps you decide which card to use for a large purchase. If your washing machine dies, you’ll want to use a low-rate card to replace it. Using a simple spreadsheet can track your details and help you decide at a glance.

3 . Figure out your payment system

5 Secrets to Successfully Manage Multiple Credit CardsLate fees and interest can cost a significant amount, so making sure your payments are on time is key to saving money. Some people prefer automated payments, while others like to pay manually. No matter your preference, setting up due date alerts can ensure that you don’t miss any payments. Smartphone apps abound to help, and many card companies offer this service, too. Remember, if the due date is a problem, card issuers may be able to adjust that for you.

4 . Get familiar with your statements

5 Secrets to Successfully Manage Multiple Credit CardsWith multiple cards to track, it’s important to review your accounts regularly. Identity theft is common; look for any suspicious activity or charges you don’t recognize. Also, watch for alerts from your credit card companies. Often, they’ll contact you if something looks amiss.

5 . Keep them active and open

5 Secrets to Successfully Manage Multiple Credit CardsCredit score calculations are based on many factors; credit utilization rate is one. This simple calculation divides your balances by your limits to get a percentage. Typically, a credit utilization rate below 30 percent keeps your credit scores optimized. For this reason, use your open cards every so often. Credit card companies often close inactive accounts. In fact, do not close your zero balance cards, either. Doing so can shorten your credit history. It can decrease your available credit, and neither of these actions is good for your credit score.

Keep track of your spending, keep your balances low, know your card details and always pay on time. Commit to doing those things often to keep your scores high with little effort.