Should I get a second credit card?
There can be a lot of advantages to having multiple credit cards when they’re used responsibly, like maximizing rewards potential or taking advantage of a lower interest rate. But getting a second card might not be the right move for everyone.
Learn more about when it might 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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When managed well, a second credit card can help you build credit, provide more buying power and offer additional benefits.
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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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Checking whether you’re pre-approved can help you avoid unnecessary hard credit inquiries.
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You might choose to wait to get a second credit card if you plan to apply for new credit products in the near future or if you’ve recently applied for a credit card.
When to 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.
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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.
- You’re interested in additional benefits: You might consider a second credit card if you want to take advantage of a promotion, like a new cardholder bonus, or to secure benefits other than those your current card offers.
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 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 whether the rewards you can earn are worth the fee.
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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.
- Find out whether you’re pre-approved: If you’re not sure what card you may qualify for, you can see whether you’re pre-approved first. Pre-approval with Capital One is quick and won’t hurt your credit scores. Plus, it could help you narrow your choices.
Can having two credit cards help improve 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—or the amount of money you have left to spend on your card—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 Consumer Financial Protection Bureau (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. But 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.
What to consider when applying for a second credit card
Here are a few questions you might ask yourself before applying for a second credit card.
How might your credit scores be impacted?
With responsible use, opening a second credit card can help improve your credit scores. But opening the account could cause a temporary dip in your credit scores if the application triggers a hard inquiry.
CreditWise from Capital One is free and lets you access your credit report and credit score without hurting your credit scores. You can also request free credit reports from all three credit bureaus at AnnualCreditReport.com.
What are your future financial plans?
If you plan on shopping for other types of credit in the near future, like a mortgage or car loan, experts recommend you avoid applying for a new credit card for at least six months beforehand. That’s because even though your credit might only drop by a small amount due to the new credit inquiry, it could affect whether you’re approved for the loan and the terms you might get.
Have you applied for a credit card recently?
If you’ve recently applied for credit, you may want to wait before you try getting another credit card. That’s because too many hard inquiries could signal to lenders that you’re having difficulty managing your existing financial obligations.
Plus, some credit card issuers might have their own stipulations about how often you can apply for new credit and how many cards you can have from the same issuer.
Getting a second credit card FAQ
Here are a few frequently asked questions about getting a second credit card.
Should I cancel my old credit card once I’m approved for a new card?
Experts generally recommend keeping unused credit card accounts open. That’s because 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 negatively affect your credit utilization because it can decrease your available credit.
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. You might choose to apply for another credit card if your credit score has improved, you have proven your ability to manage credit well, or if you’re looking to take advantage of benefits or promotions.
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 whether you should get a second credit card. But if you’ve done your research and decided it’s the right time, you might find yourself in a position to look for a card that’s right for you.
You can compare Capital One credit cards and see whether you’re pre-approved before you apply. The process is simple and won’t hurt your credit scores.
