Frugal Living

Is Having One Credit Card Frugal?

Some people only carry one piece of plastic on them; others have a card per wallet. You are the former because you assume it’s the most frugal option. Only applying to a single card company means there is less chance of spending, which means the risk of debt is low. Only now, you’re having second thoughts.

As logical as it sounds, there are advantages to carrying more than one card on your person. And, they may help you live a more frugal life than the one you lead now. It all depends on the pros and cons and how you can tailor them to your lifestyle. Here are the features which will help you make a decision.

The Benefits

Faster Payouts

Rather than spreading your spending over a multitude of cards, you have one which accrues points at a rapid rate. As a result, it’s easier to build up a wealth of points which you can turn into gifts or cold, hard cash. And, you’ll be able to cash them in within a shorter period as they get the majority of your attention. This is particularly true when a card has a “minimum redemption amount.” So, that means extra bonuses for you and the family.

Small Risk Of Identity Fraud

If someone picks up a card on the floor and sees an opportunity, you’re in trouble. Usually, retailers never ask for proof the card belongs to a person before they accept the transaction. They process the details and send the package to the delivery address. Obviously, the risk increases when you have multiple cards as you have more to lose. With one, all you need to do is ensure it’s secure and in a safe place. And, with antivirus software on your computer, there shouldn’t be a high risk of hacking either.

The Disadvantages

Not Maximizing Rewards

While rewards may appear quicker with one card, you may leave a lot of them on the table. This happens because certain companies offer specific features based on the type of spending or items. For example, you may get cash back on purchases or cash withdrawals. With one card, you’ll only get a single reward as opposed to a range of them, and that’s why it’s one of the behaviors that hurt your credit. And, the chances are you won’t tweak your patterns to suit the incentives. Usually, people shop regardless and hope for the best.

High Utilization Ratio

Borrowing money has its difficulties. Opt for too much money and your credit rating will take a hit. As a rule, it’s about 30% of your limit. With only one card, it’s difficult to spread the amount. After all, there aren’t any other accounts that will gladly take the hit. So, your score may fall as a result and impact your ability to borrow money. Plus, it means paying attention to everything you spend and ensuring the amount stays below the threshold, which takes a lot of energy.

Is having one card frugal? It depends on your habits and how much you spend.

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