Home/ Money / Personal Finance/  Here is how you can manage multiple credit cards efficiently

Fear of overspending and falling into a debt trap may be keeping you from applying for an additional credit card. However, having multiple credit cards can be beneficial if you follow a disciplined approach towards credit card spends and repayment.

Let us look at how efficiently you can manage and make the most of multiple credit cards.

First, you must plan your credit card spends according to interest-free periods, i.e. the duration between the date of a credit card transaction and the due date of repaying the bill. No interest is levied on credit card transactions, barring ATM cash withdrawals, during the interest-free period as long as you repay the entire bill amount within its due date.

“This period can range anywhere between 18 and 55 days, depending on the transaction date. If you have multiple credit cards, you can make the most of this interest-free period by distributing your big-ticket expenses across different cards, based on the residual interest-free period," said Sahil Arora, senior director, Paisabazaar.com.

Second, spread your transactions based on reward points and other benefits. Credit card issuers design their reward point programmes, cash backs and other benefits based on target consumer segments.

If you spend a sizeable amount across multiple categories such as shopping, fuel and travel, you can accrue higher benefits by spreading it across multiple cards based on their reward point structure and other benefits.

Third, you should compare equated monthly instalment (EMI) options and offers on various credit cards. Credit card issuers tend to offer no-cost EMIs on select products and services.

“Merchants bear the interest costs of no-cost EMIs and the cardholders are required to repay the purchase cost in EMIs. However, the GST levied on the interest cost component of the EMI has to be borne by the cardholder. Some credit card issuers offer additional discounts to cardholders upon choosing the no-cost EMI option," said Arora.

Fourth, redeem accumulated reward points before expiry. The accumulated reward points close to their expiry dates should be used for purchasing vouchers, merchandise, etc., from the partners listed in the reward catalogues. “You can also use the accumulated reward points to pay off your outstanding credit card dues in case your card issuers allow you to do so," said Arora.

Fifth, you must keep track of credit card due dates by setting reminders. Various apps and wallets offering credit card bill repayment facilities also extend bill repayment reminders to their users.

Navneet Dubey
Navneet Dubey is a personal finance writer and artist. Over the past decade, he has written feature stories on insurance, financial planning, lending and borrowing.
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Updated: 12 Jul 2021, 01:34 AM IST
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