March 31, 2022

3 Credit Cards? Yes, but for what?

Joshua Jeans
People Operations, Mortgage and Finance Specialist

We don’t think it is too crazy to assume that everyone has at least one person in their life, maybe an eccentric uncle or cousin that always hustles, who is trying to get them to “use my link” to sign up for a new credit card so that they can get bookoo points and fly to Cancun for free. And we know that if you said yes every single time someone pushed a credit card your way for 5% cash back on purchases or exclusive access to seasonal sales, then you would have far too much plastic to comfortably fit into that wallet you really love. In all seriousness, having multiple credit cards can be a huge benefit to you if you use them well. If you are new to the credit card game, we have 3 reasons to recommend that you shoot for 3 cards to start with; your rewards, your security, and your future.

Your Rewards

This may be the most obvious reason of all to use credit cards. Many credit cards have rewards for use such as cash back, travel points, or discounted services. One way to maximize the effectiveness of your rewards is to take some time with your budget and figure out where most of your dollars are going every month. If we set aside rent, your biggest expenses likely include categories such as groceries, gas, travel, or shopping. Once you figure out where you regularly spend the most money every month, then you can start to search for cards that fit your rewards profile. 

A good way to break down your credit cards is to think about one card for the rewards, one card for general cash back on everyday purchases, and one card with a lower interest rate to use in case of emergencies. The key to maximizing your rewards-focused credit card is to make sure you are getting the highest rewards possible on your biggest spend categories. Some cards are awesome in that they may hit multiple categories for you at the same time, such as 3% cash back on both gas and restaurants. If those are your biggest spend categories, then that credit card would serve you well by getting you some cash back for the purchases you are making most often. Or maybe you are the chef of your friend group and groceries are always your biggest monthly expense, then look to find a card that will reward you for those purchases specifically.

After you have picked out a card to rake in the rewards on your big spend categories, it is good to have a card for general use as well. You know, the one you can pull out for all those random things that you don’t think about like ink for your printer (yeah right, who has printers anymore?) or a new dog bed for your goodest boy. You can find lots of options that will give you 1% or even as much as 2% cash back on all of your general purchases, which can add up over time. 

Finally, after you have a credit card to capitalize on some big time rewards and another card to take care of your everyday spending, it can be a really good idea to have a credit card that you don’t use so frequently that you can keep on reserve for emergencies. It would be best if this card has the lowest interest rate possible, just in case someday you need to put a big expense on there like a new transmission for your car or a huge vet bill from when your goodest boy accidentally swallowed his new toy instead of fetching it.

Your Security

Credit cards are a very secure form of making purchases. If someone ever were to steal your wallet, most credit card providers will allow you to freeze your cards and be sure no charges are racked up on your account. Unlike credit cards that have a safety mechanism, cash can easily be taken from your wallet and a thief with your debit card can access your own funds that are not easy to get back. With a credit card, if you see a fraudulent charge, you can work through that with your credit card provider and they will assist you in getting the charge removed and sending you a new credit card that has not been compromised. 

Your Future

The last advantage of having multiple credit cards is that responsible use of those credit cards helps you to build up a credit history faster and ultimately can play a big role in increasing your credit score. An increased credit score can open up doors in the future for purchasing a home or even getting a business loan with better interest rates than you might have without a solid credit history.

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