Should I get a second credit card?

Thinking it may be time to get a second credit card? When used responsibly, there can be a lot of advantages to having credit cards, like building credit and earning rewards. But it 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 card and how to use credit cards to help build your credit.

Key Takeaways

  • There’s no one-size-fits-all answer for if you should get a second credit card. It all depends on your unique needs and circumstances. 
  • You might consider a second credit card if your credit score has recently improved, you want to maximize rewards potential or you have high-interest debt you want to transfer to another issuer. 
  • Before applying for a second credit card, make sure to review and compare cards. That includes looking at things like the credit card’s terms, fees and rewards. 
  • Using credit cards responsibly can be part of building credit and improving your credit scores. Responsible use means doing things like paying on time and keeping your credit utilization ratio low.

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When should you get a second credit card?

The decision of when to apply for a second credit card is a personal one based on your individual circumstances. Here are some signs you may be ready to add another credit card to your wallet:

  1. Your credit score has recently improved. A good or excellent credit score may unlock access to credit cards with higher spending limits and better rewards.
  2. You want to maximize rewards. A rewards credit card lets you earn cash, miles or points on eligible purchases you make with the card. And that can help you get the most out of spending you would be doing anyway. The best type of credit card for you might align with your spending habits or goals. For example, if a dream vacation is in your plans, a travel rewards credit card might be the right call. 
  3. You have high-interest debt. A balance transfer lets you transfer debt from one credit card issuer to another to consolidate debt, simplify payments and potentially pay less interest. Some balance transfer credit cards may even come with a 0% introductory annual percentage rate (APR)

There are also signs you might not be ready for a second credit card just yet. Say you’re planning on applying for a mortgage soon. The Consumer Financial Protection Bureau (CFPB) recommends avoiding other new credit applications. 

What to look for in a second credit card

What you should look for in a second credit card depends on your lifestyle, spending habits and financial goals. Here are some things to look into when shopping for credit cards:

  1. The card’s account terms and disclosures. This is where you’ll find information on things like fees, rewards and APRs. Some credit cards offer an introductory APR. But it’s important to know when that promotional APR ends and the standard APR begins. And a penalty APR may kick in if you do things like miss a payment. There may also be different APRs for things like cash advances and balance transfers. 
  2. Annual fees. Make sure to check if the card has an annual fee. And consider if the rewards you can earn with a particular card are worth it.
  3. Rewards. Some rewards credit cards focus on specific benefits, like travel or dining. Others offer cash back on every purchase you make. Think carefully about your spending habits, so you can make an informed decision about your second credit card.

What happens when you apply for a credit card?

Credit card applications can temporarily impact your credit score. So if you’ve decided to apply for a second card, you should brush up on what happens when you apply for a credit card. 

Applying for a card triggers a hard inquiry on your credit report. According to FICO®, a single hard inquiry will only cause your credit score to drop by a few points. But having too many inquiries on your credit report, especially within a short period of time, may have a bigger impact, the CFPB says. 

If you want more details on the credit card application process, find out how to get a 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 for card offers before you apply. It’s quick and won’t hurt your scores. Plus, pre-approval can help you narrow down your choices, so you can find the best credit card for you.

Can having two credit cards help improve my credit scores?

Using any credit card responsibly over time can be part of building credit. And if you’re looking to use a second card to help you improve your credit scores, it’s important to know what factors may affect your scores:

  • Payment history. Credit-scoring companies like FICO and VantageScore put significant weight on payment history. So no matter how many credit cards you have, it’s crucial to pay on time every time. 
  • Credit utilization ratio. This is a measure of how much of your available credit you’re using across all of your credit accounts. The CFPB recommends keeping your credit utilization ratio below 30%. Adding a new line of credit means that you’ll have more available credit. But it’s still important to keep your balances low, or pay them off completely each month, which can also help you minimize interest charges. 
  • 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. This is a measure of the diversity of your credit accounts. Having a good credit mix between 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, since 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. 

Monitor your credit

If your application isn’t approved, don’t give up. Practice good credit habits, monitor your credit score and consider applying again once you’re in an improved position.

One way to monitor your credit is with CreditWise from Capital One. CreditWise lets you access your TransUnion credit report and VantageScore® 3.0 credit score without hurting your score. It’s free for everyone, not just Capital One cardholders. You can even see the potential impacts of financial decisions on your credit score before you make them, with the CreditWise Simulator.

Getting a second credit card in a nutshell

Ultimately, 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 position to find a card that’s right for you. 

Capital One has a credit card comparison tool that may help. And remember, you can also see if you’re pre-approved for card offers before you apply without hurting your credit scores.

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