Benefit of having 2 (two) Credit Cards of Similar Value

   

Two credit card are considered of similar value if both of these credit cards have similar credit limit, similar interest rate, both have reward program  and have similar interest rate period. The credit card can be issued by different bank, or have different brand (i.e: Visa vs Mastercard) but as long as 4 factors above are similar, it still can be consider of the same value. So, why we will have a benefit if we can have 2 credit cards of similar value ?

Although you are already following the credit card best practices, sometimes – it will happen sooner or later, an event out of your control just happen. And as always, you are not to be upset about it (remember, it’s outside your control – nothing you can do about it) – especially since you have prepared yourself and have mitigate this risk.Because the 2 cards are interchangeable of each other, some of the following benefit may apply for you:

1. Say you always pay off the monthly statement, but this time your salary arrive late due to some technical problem and you missed the due date. Once the due date is passed, then the credit card is no longer have ‘interest free period’ means anything you buy with that card will be charged that hefty interest rate from day 1. Not only that, you need now to pay the other 44 days or 55 days of previous interest free period.The problem is: you will need to still shop and live normally this month, but of course you want to minimize the cost..If you have 2 credit cards of similar value, the problem can be solved easily. This month, instead of using the usual credit card, do all the shopping using the 2nd credit card (which still has the interest free period), so there will be no additional interest cost this month for your transaction.You only have to pay the interest from the last month plus pay off the statement that you cannot pay on time.  Then the other credit card will recover its ‘interest free period’ on the next cycle since you have paid it off.
2. The next level of scenario is: how if you have to have a urgent, very important but unpredictable big expense. Say: your immediate family overseas fall ill or need your presence immediately or other similar thing (no time to break those time deposit or sell those stock to cover the expense).
   Again, if you have 2 credit cards of similar value, the problem can be solved easily. Put this unexpected big expenses into the second credit card.  You may not be able to pay it off immediately, but because of interest free period,  for the next 44 or 55 days you don’t have to pay any interest. And there could be a chance within that period you find a way to pay it off. Even if you cannot pay it off, then just let it stay on this second credit card and you will pay it off in time. But the most important thing is your normal day to day transaction with the first credit card will not be affected at all.
3. If you have debt in the credit card (you did not pay it off) you can do balance transfer to make use of generous offer of interest free when doing balance transfer. This means you have relieve on paying the minimum amount per month, but also can give you a chance to pay off the principal instead of paying the interest. This cannot be happening if you don’t have 2 cards. Read: this article about balance transfer for further reading.
4. Simple benefit: the replacement of each other. Imagine you are in the big queue of supermarket, pay with credit card and get decline. Repeated and still rejected. You don’t have cash with you. What will be more valuable to have a backup credit card to save your face and the time ? – I would recommend that the 2 credit card that you have should have been of different brand, i.e: one is a Visa card, the other is Master Card. In this case, if the Visa processing center have problem, you have another chance that Master Card is still operational. Of course if the telephone line is the problem then no matter what your card is, there will be no immediate resolution.
5. And finally of course the simplest form of benefit: you have increased buying power induced by the additional credit limit. But beware that this benefit can bite on you and trap you into unnecessary debt. Furthermore, if you are not in the business, probably you will hardly see the benefit of having increased buying power.

What the negative factor of having 2 credit cards of similar value ?

1. There will be 2 membership fees that need to be paid, but if your transaction can get enough points to cover both, then it will be free anyway. Otherwise you need to consider this as small cost to have peace of mind that you are prepared if something unexpected happened.
2. If you cannot control yourself, then it’s very easy to overspend this credit limit into irresponsible buying. Buying “doodah”, Robert Kiyosaki said. (Example: those TV, set top box, game console, stereo, extra HDD, car, CD/DVD, new laptop, etc)

Conclusion

If you haven’t got your 2 (two) credit card of similar value, go start find and apply for it… But remember: be responsible. Your life, your responsibility! The debt trap is the risk.
And.. no!  No more than 2 (two) credit cards…

Related Posts

• Credit Card Best Practices
• 7 Ways to Maximize The Benefit of Credit Card
• Credit Card Balance Transfer: Use It For Your Great Benefit
• Corner Store
• Part 2 – Credit Card Balance Transfer: Your Own Calculation

Denis Kristanda  

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