If you have a credit card, then you might sometimes wonder whether to get another one. It is a decision that is worth some thought as you may find that it could have quite an impact on you both in a positive and negative way. It is therefore worth thinking about the different consequences of it.
If you spend on a credit card but do not repay your balance in full you will be charged interest. This cost will be charged every month until you repay all the money that you owe. If you have two credit cards and do not repay the full balance on both of them, then these costs will be higher. This means that you will be paying more. This could have an impact on what else you can afford and it could even mean that you will need to cut back on other things to be able to afford it. This may be okay for you, but it depends what you have to cut back on. You may buy a lot of luxury items and easily be able to cut back, but if you are already struggling to pay for all of your necessities then having this extra cost to pay could be a problem. It is also worth thinking about whether you want to pay this extra cost. Consider whether you think that it is worth it.
When you have a second card then it will give you an opportunity to spend more money. This means that you will have access to more funds. This can be okay if you need the money to buy something urgent but it can become more of a problem if you use it to buy all sorts of general luxuries. These are items that it is not necessary for us to have and by using a credit card we could potentially buy a lot more of these items. If we cannot afford to repay the card, then we will be charged interest and that extra spending will mean that we will have to pay more in costs for the spending. If we repay it all, then this may not be such a big problem.
However, being encouraged to spend more money could be a problem. Some people like spending money but then get themselves into trouble because they have spent more money than they can reasonably afford to repay. However, they feel that the credit on a credit card is theirs to spend and that they deserve to have some treats. However, they will often not think about the consequences of having to repay the money.
If you have two credit cards then this might not look great on your credit report. It might look like you are desperate for money or that you spend a lot. It will also show if you are not repaying the full balance each month and this may not look good for you either. You may not worry about this, but if you want to rent a home, get a mortgage or something like this, then your credit report will be checked and you may be turned down if it is felt that you are a high risk and having two cards could be considered to be high risk. It is worth bearing this in mind as it could be important in the future.
It is a big decision and it is worth thinking hard about the impact that having a second credit card could have. It could be better to see whether your current card issuer will increase the amount of credit that they will give you. This means that you will be able to borrow more on this card and should eliminate the need for you to get a second one. This will not look so bad on your credit report but it might still encourage you to spend more than you need to and give you bigger interest charges so you still need to be careful.