Should I get a second credit card?
There can be a lot of advantages to having multiple credit cards when they’re used responsibly. But getting a second card might not be the right move for everyone.
Learn more about when it may make sense to get a second credit card, what to look for in a second card and how to use credit cards responsibly to help build your credit.
What you’ll learn:
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Whether you should get a second credit card depends on your needs and circumstances.
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Before applying for a second credit card, it might help to compare card terms, fees and rewards.
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Using credit cards responsibly can help you build credit and improve your credit scores. Responsible use includes making at least the minimum payment on time and keeping your credit utilization ratio low.
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Checking whether you’re pre-approved for credit card offers can help you avoid unnecessary hard credit inquiries.
Reasons you should get a second credit card
Applying for a second credit card is a personal decision. Here are some signs you may be ready to add another credit card to your wallet:
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Your credit score has recently improved: A good or excellent credit score may unlock access to credit cards with higher credit limits and better rewards.
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You want to maximize rewards: Depending on the type of credit card, you could earn rewards that better align with your current lifestyle and spending habits. For example, if you’re planning a dream vacation, you may want a second card that offers travel rewards.
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You have high-interest debt: A balance transfer might let you consolidate debt, simplify payments and potentially pay less interest. Some credit cards may even come with a 0% introductory annual percentage rate (APR). But keep in mind that balance transfers may come with fees.
- You want emergency backup: Credit cards can offer a way to cover unexpected expenses. Knowing you’ll be able to access funds in an emergency could give you peace of mind.
How to choose a second credit card
Your lifestyle, spending habits and financial goals are a good place to start when making any financial decision. The same is true if you’re considering a second credit card. Here are some things to look into if you’re comparing credit cards:
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Review the card’s APRs: If a card offers an introductory APR, it’s important to know when the promotional rate ends. There may be different APRs for things like cash advances and balance transfers. And a penalty APR may kick in if you do things like miss a payment.
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Check the card’s annual fee: If you’re interested in a card that has an annual fee, you could try to determine if the rewards you can earn are worth the fee.
- Understand the card’s rewards structure: Some credit cards offer elevated rewards on things like travel or dining. Others offer the same cash-back rewards on most purchases. Thinking carefully about your spending habits could help you make an informed decision.
What to consider when applying for a second credit card
Here are a few things you might want to do before applying for a second credit card.
Find out if you’re pre-approved
Not sure what card you might qualify for? You can see if you’re pre-approved before you apply. It’s usually quick and won’t hurt your scores. Plus, it could help you narrow your choices.
Monitor your credit
CreditWise from Capital One lets you access your credit report and credit score without hurting your credit scores. It’s free for everyone, not just Capital One cardholders. With the CreditWise Simulator, you can even see the potential impacts of financial decisions on your credit score before you make them.
You can also request free credit reports from all three credit bureaus at AnnualCreditReport.com.
Consider hard inquiries
Applying for a credit card triggers a hard inquiry on your credit report. According to FICO®, a single hard inquiry will have only a small impact. But having too many inquiries on your credit report, especially within a short period of time, may have a bigger impact, the Consumer Financial Protection Bureau (CFPB) says.
Can having two credit cards help improve my credit scores?
Using a second card responsibly over time can be part of building good credit. And if you’re looking to use a second card to help you improve your credit scores, it’s helpful to know which factors may affect your scores:
Payment history
Payment history is a major factor in how credit scores are calculated. Always paying your credit card bills on time, no matter how many cards you have, can help you build a positive payment history. And that can help improve your credit scores.
Credit utilization ratio
When you open a new credit card, your available credit increases. If you keep your spending levels the same, this could improve your credit utilization ratio. This ratio refers to how much of your total available credit you’re using. As you use the card, the CFPB recommends keeping your credit utilization ratio below 30%.
Credit age
The CFPB says that having a higher credit age can help your scores. Opening a new credit card may bring the average age of your credit accounts down and affect your scores.
Credit mix
Credit mix measures the diversity of your credit accounts. Having a good balance of revolving credit and installment loans may show lenders that you can manage different types of credit responsibly. Opening a second credit card may not significantly affect your credit mix because you already have that type of credit account.
Applications for new credit
Applying for new credit can trigger a hard inquiry. A single hard inquiry generally won’t have a big impact on your credit. But too many hard inquiries may hurt your scores in some cases. The CFPB recommends only applying for the credit you need.
Getting a second credit card FAQ
Here are a few frequently asked questions about getting a second credit card.
Should you close an old line of credit once you’re approved for a new card?
Credit age can be a major factor in credit scores. So closing your oldest line of credit might not be the best idea if you’re trying to build your credit. As FICO says, “A longer credit history will always have a positive effect on FICO scores.” Closing an older line of credit could also affect your credit utilization.
Is it bad to have multiple credit cards?
When you use credit responsibly, it could be a good thing to have more than one credit card. Multiple cards can give you more available credit. It can also mean more spending flexibility. And if you manage multiple credit accounts well, lenders may see you as less of a risk and offer their best borrowing options and terms.
But having multiple credit cards may not be right for everyone. If you’re struggling to pay off your existing credit card debt or have a tendency to max out your card, it’s helpful to think about how you’ll manage two accounts.
How long should I wait to get a second credit card?
Looking at your lifestyle, credit scores and financial situation can help you decide what’s right for you. It’s also worth considering whether you’re in a good position to manage multiple credit card accounts.
When should I apply for another credit card?
Getting a second credit card is a personal decision. Only you can decide what’s right for you. But if you’re planning on applying soon for another loan or line of credit, such as a mortgage, the CFPB recommends avoiding other new credit applications.
Key takeaways: Getting a second credit card
Only you can determine if you should get a second credit card. But if you’ve done your research and decided it’s the right time, you can put yourself in a position to find a card that’s right for you.
You can compare Capital One credit cards and see if you’re pre-approved before you apply. The process is simple and won’t hurt your credit scores.
