Skip to main content

Multiple CREDIT CARDS

 

Credit cards have become a part of life for most individuals. Obviously, they come with benefits. However, if used wrongly, the cardholder can also land up in trouble. Huge number of cards is one reason why most cardholders face problems. People keep adding cards as getting a card is very easy, especially for those with a regular income and a good record. This is one stage where an individual has to be alert: they need to be selective in their choice of a bank, as well as the total number of cards. With six to 10 cards, even managing the details becomes a problem. Here are a few areas that need attention: a little care can make a big difference.

PAYMENT

There are several benefits touted for using multiple cards. One of the biggest is the credit period for repayment. This can be done by using the card that has just started its credit period. For example, if the billing cycle for one card is from the 1st to the 30th of the month, with the payment due date on the 15th of the next month, and for the other it is 11th of one month to 10th of the next, with the payment due on the 25th, then an expense on the 12th should be routed to the second card, where the payment will be due after 45 days.

The problem, as the number of cards multiply, is a wave of dates when the payments have to be made. Remembering the card used and then the due date is difficult, especially when there is no specific method in this usage. If there are five cards on which payments come up, say, on the 15th, 17th, 20th, 23rd and 25th of the month, making the payments is going to be more troublesome than completing the expense. There is danger of a missed payment too. If this happens, the charges in terms of the late payment and even interest could wipe out the entire benefit that might have been generated through the use of different cards. You might be potentially saving Rs 100 on getting the largest credit period but one misstep can set you back by Rs 500-700.

BENEFITS

Multiple cards could destroy benefits that are linked to usage of available credit line. If there was a certain limit, which qualifies for additional benefits in terms of points or other preferential service from the card issuing bank, it could disappear when spread across various cards. An expense of Rs 75,000 on a card during six months can put you in a preferential category, but the same expense distributed among five cards would leave you nowhere. A small savings by using multiple credit cards could be offset by the fact that the spreading of the amount will lead to a situation where the person is not able to redeem his card points anywhere. So, if a card holder was getting 1,500 points for expense on a single card, spreading this across four cards could result in 500, 400, 300 and 300 points, respectively, which might not be enough to get any meaningful redemption gift, as most of these could be starting at 650-700 points and above. This angle has to be taken care of.

LOSS

When there are many cards held by an individual, keeping track of what is happening with these is also difficult. There are two main areas that will lead to a disadvantage for the individual. Under the first situation, if there are charges or some other details that are to be changed on the cards, it could become a paperwork nightmare. If a person has a changed telephone number, communicating this for fivesix different cards and ensuring this is updated can be tiring.

Also, if one of many cards is lost, it might not come to the notice of the holder. This could lead to time going by during which there might be misuse of the card. This would be less likely if an individual held less. Keeping the number held in check ensures smoother handling.

Popular posts from this blog

Real Returns in Investing

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300 Real Returns in Investing     A Anil Singh (name changed), 44, works with a private company and believes in investing his entire savings in fixed deposits. His financials from the year 2000 till date is given in the table. Anil's savings in FDs gave him an average return of around 8%. The total amount saved over the 174 months (From January 2000 to June 2014) is Rs 49.80 lakh. The value of his investment today is around Rs 66.71 lakh. Naveen Singh (name changed), 44, works in a similar profile like Anil. However his expenses were on the higher side. His financials are as in the table. Naveen invested only in equities. The total amount saved over the 174 months (From January 2000 to June 2014) is Rs 38.40 lakh. The v...

Budget 2014 Highlights for Saving

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   The new finance minister Arun Jaitley has just presented his first budget. What measures does the budget contain that will specifically impact savers and investors? Here they are: 1. Housing loans exemption for self-occupied properties increased to Rs2 lakh: Earlier this amount was Rs1.5 lakhs. This move barely keeps pace with the inflation in asset values.   2. Investment limit under 80 (C) increased to Rs1.5 lakh: This is a good move again and offers some relief to taxpayers.   3. IT exemption increased to Rs2.5 lakh, Rs3 lakh for senior citizens. This comes as a minor relief for taxpayers.   4. Annual PPF ceiling to be enhanced to Rs1.5 lakh, from Rs1 lakh: This is in tune with the change in 80C.   5. Long term capital gains tax for debt funds has been rai...

ICICI Prudential MIP 25 - Invest Online

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   ICICI Prudential MIP 25     (CRISIL Rank 2)   This scheme was launched March 2004. Please see the chart below for the one, two, three and five years annualized returns from this scheme. The minimum investment in the scheme is Rs 5,000. The asset allocation of the portfolio is 24% equity, 72% debt and 4% cash equivalent and others. Please see the chart below for the monthly dividends declared by the scheme, on a per unit basis, over the last 5 years.   For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call Leave a missed Call on 94 8300 8300 Leave your comment with mai...

Franklin India Smaller Companies Fund - Invest Online

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   Franklin India Smaller Companies Fund   While the universe of small-cap stocks in India is vast, there are very few equity funds which take on the task of sifting through this space for good long-term bets. Franklin India Smaller Companies Fund has managed this with aplomb. What we like about this fund is its significant out-performance of its category and benchmark over the last four years, and its ability to moderate portfolio risk despite investing in the riskiest segment of the equity market. This fund's stock selection strategy, like that of Franklin India Prima Fund is focused on finding companies that generate positive cash flows across business cycles. High return on investment and manageable leverage are also filtering criteria. Says R. Janakiraman, fund ma...

How to open a Capital Gains Account?

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   How to open a Capital Gains Account? You can open a capital gains account in an authorized bank. The Government has notified 28 banks which can open the Capital Gains Account on behalf of the Government. You have to apply for opening the account by filling out the required application form (Form A) and submit proof of address, PAN card and photograph. You cannot withdraw funds from a capital gains account using a cheque book or ATM, like you do in your normal savings bank account. There are procedures to be followed to withdraw funds from the capital gains account. Investment in Specified Bonds Section 54EC of Income Act provide that if the seller invests whole or part of capital gains arising from the sale of asset in specified Capital Gains, within a period of six months of the ...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now