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- Opening a second credit card is a great way to diversify your rewards earning.
- Identifying your goals and spending habits can help you choose the best second card for you.
- Picking a card with a substantial sign-up bonus can give your rewards a big boost.
- Read Insider’s guide to the best rewards credit cards.
For most of my life, I’ve only had one personal credit card. I’ve been strict about this because I figured only having one credit card would help me stay on track to make sure I’m not carelessly spending or racking up the debt.
It’s also been something my parents instilled in me at a very young age. My mom would always tell me that If I didn’t have the cash to afford something, it shouldn’t be charged on a credit card. Because of her words of wisdom, I’ve been strategic and calculated about my credit card spending and my use of only one card.
Though it’s been tough to avoid the temptation coming from retail stores, credit card companies, and friends who are loyal to their card of choice, I’ve managed to turn down major bonus reward offers and have probably lost out on quite a lot of money but just sticking to one credit card for so long.
However, now that I’ve been able to take full control of my finances, and feel ready to get a second credit card, I want to make sure I’m picking one that’s in line with my overall goals.
If you are shopping around for the best second credit card, here’s how you can go about determining which card is the right one to open.
Understand your goals
The very first thing to break down is your reasoning for getting a second card. Are you doing this because you want to earn a large welcome bonus to use toward another financial goal (travel points to plan a honeymoon or a cash reward to partially cover a big purchase)? Or perhaps you want to have two credit cards that you use for different reasons throughout the week, or realize you have one or two spending categories that aren’t being fully rewarded with your current card.
For example, my top spending category is food (dining and grocery stores) and my current credit card doesn’t give me a lot of points for this category. If I got a second credit card, I could get one that gives me 3% to 5% cash back on that spending category.
Once you know your reason for getting a second credit card, you can then continue to plan your strategy to make sure you’re picking the right one.
Identify upcoming purchases
Plan out any upcoming or future purchases where that new second credit card might come in handy. For example, if you’re looking to plan a major vacation, getting a travel rewards credit card — like the Chase Sapphire Preferred® Card — with a big bonus and additional rewards for booking travel using the card, and a portal (that only credit card users have access to) that helps you get extra discounts on flights, hotels, and rental cars, would be a potentially good move to save you money.
If you’re buying expensive items (furniture, car parts, kitchen essentials) and want to offset those purchases by getting cash back, knowing that will help you further determine which card is right for you.
Looking at your current portfolio of credit card rewards juxtaposed with future spending lets you see what kind of second credit card will add even more immense value to your life.
Good to Excellent
3 free nights (each valued up to 50,000 points) after qualifying purchases and 10x total points on eligible purchases in select categories
Good to Excellent
$200 after spending $500 on purchases in the first three months from account opening
Good to Excellent
Think about diversifying rewards
I’ve grown frustrated with my current JetBlue Card because it only earns points that I can apply toward travel with JetBlue. I feel limited and only earn 2x points on dining and at grocery stores.
I want a second credit card that offers very different rewards so I have variety in what I’m earning.
If you already have a credit card that gives you robust travel rewards and it’s not only giving you great perks for when you plan vacations but also lets you earn a good amount of points with everyday spending, you might want your second credit card to give you very different rewards — and vice versa if you have a cash-back card and no travel benefits that come with it.
Take inventory of all the rewards and perks offered by your current card and then research what other kinds of offerings are out there (from flexible point cards, cash-back cards, or a co-branded card for an airline or hotel chain that you frequently travel with).
Look for a big sign-up bonus
Once you have an idea of the type of credit card you want to go with, spend quality time not only searching for the one that meets all of your goals but also includes a beneficial intro offer.
These bonus rewards are only available to you when you open up a new card and meet a certain spending requirement so you want to make sure you snag a substantial offer, without sacrificing any of your rules (for example, going with a credit card that has an annual fee if that’s something you don’t want).
Be sure to check on the latest available offers for credit cards you’re interested in before you make your final decision to open your second card.