According to surveys of financial and monetary institutions, credit cards are most effective type of plastic money being used in the market. Credit cards basically are small plastic cards issued by the bank to the bank holder or user. The credit cards allow the user to purchase goods and services on credit. The goods are purchased on credit on the basis of the cardholder’s promise to the issuer of the card for paying the traders along with the agreed charges.
Basically, a credit card is a thin rectangular plastic card, which is issued by financial institutions such as banks. It allows the users to obtain financial loan at a pre-specified approved limit for making payment of the purchased goods. The credit card is issued on the basis of the credit history or in other words the credit score of the borrower of funds. Once using the credit card, one needs to make minimum payment each month in order to the return the financial amount loaned by the due date on the balance. Not only purchases, but balance transfers and cash advances requiring sending loaned amount back is to be made using the credit cards.
Credit cards usually are of different nature. They comprise travel rewards credit cards, which are usually used in the airline and the hotel industry. Flexible travel credit cards provide for the bonus points on any travel purchase regardless of who the travel provider actually is. Premium travel credit cards offer luxury benefits while travelling. In addition, there are cash rewards credit cards, which enable a person to get redeemed points as rewards for the gifts. Balance transfer credit cards help to pay back the credit taken at an interest free rate or amount with a balance transfer fee of as nominal as 3%. Business credit cards also help to maximize the purchases of the business. These cards provide for bonus points related to purchases made online like social media advertising. In addition, student credit cards are provided especially to the students for purchasing goods from certain businesses.
Owning Two Credit Cards From The Same Bank
Usually, it is possible to own two credit cards from the same bank. It is usually based upon different contexts or situations. These can include a scenario whereby for example a user of the bank account holding one credit card faces very less or inadequate credit limit. Then it is possible to apply with the bank for enhancement of the limit by issuing one more credit card. This requires very strong creditworthiness of the bank’s holder or alternatively a very strong credit scoring or credit history of the user of the bank. Possessing sound credibility enables a credit card’s holder to better convince bank to obtain two credit cards from the same bank. Usually, the liquidity of the bank also helps to decide whether or not a user can have two credit cards from the same bank. If a bank’s liquidity level is higher, then it means it can offer two credit cards to an account holder, who already owns one credit card from the same bank. The contrary is also true whereby if a bank’s liquidity is fairly inadequate then it means that the bank might not be in a position to lend two credit cards to the same account holder.
Pros And Cons Of Holding Two Credit Cards From The Same Bank
Having two credit cards from the same bank enables a person to face several pros and cons. The major issues are that it increases the expenditure or the cost of the person. The security problem also increases as at times, the credit card payment made online is met with several scams or fraud. The banks also face the risk of their user defaulting by issuing two credit cards to the same user. Credit exposure risk of the bank can increase by lending two credit cards to the same user already holding a single credit card. Another risk to be borne by the user of the two credit cards is that if billing is not made on time on one card, then both of the cards can be blocked at the same time. This can pose one in a great hassle.
However, having two credit cards from the same bank allow users to have their hand on increased credit capacity of the bank and therefore they can make several purchases using card credits at a time. The user holding two credit cards of the same bank can do multiple stoppings at a time from different businesses and this way, the bank also reap profitability as the businesses offer it a share of the profits time to time. These are some of the benefits of holding two credit cards from the same bank. In addition, it is likely that the bank can issue one more credit card to its users for fulfillment of its specific needs and availing special offers on the usage of the products by its users.
Conditions For Availing Two Credit Cards From The Same Bank
There are certain set of conditions required to be availed for obtaining two credit cards from the same bank. The bank holder, who intends to get two credit cards must have a strong credit rating. His or her creditworthiness must be strong enough and credit scoring should be stronger as well. This will encourage the bank to provide for one more credit card to the bank account’s holder. However, if a user’s credit worthiness is poor, then the same bank might not be willing to lend another credit card to a person already owning a credit card.
Another credit card from the same bank can also be obtained by the user if an intention is made to churn credit card rewards.
Also, two credit cards from the same bank can be obtained for an unforeseeable crisis ridden situation whereby theft or a loss of one card may take place in the future. At times, one of the card’s chip is not working and there stands a need to urgently withdraw funds. Therefore, it is possible to make use of the other card for withdrawing funds to fulfill urgent financial need for any specific purpose.
General Opinion Of The Consumers If Two Credit Cards To Be Obtained From Same Bank Or Not
Some consumers are of the view that obtaining two credit cards from the same bank can improve the financial liquidity of the holder of the cards. This means that the person holding two credit cards from the same bank can use them for making a large transaction, which is usually not covered up on just one credit card. A consumer can in let’s say a week’s time manage to carry on with large amount of shopping using two credit cards of the same bank.
Some consumers are of the view that holding two credit cards from the same bank can be risky. If a user is not able to clear the billing of the amount on credit card due within the stipulated time period, then it means that both credit cards can be blocked at the same time. In addition, at times, payment is made using a credit card which is non-utilized. There is a situation where the payment is outstanding in one account and advance in another one. Both of the cards are blocked with charges of penalty or interest on them. This indicates it is always better to obtain just one credit card from the same bank and obtain another from the other bank.
A few consumers are of the view that they want to issue two credit cards from the same bank to avail facilities and privileges of travelling. These provide privileges of dining, recreation, flight tickets and airport’s lounge facilities. Having two credit cards from the same bank provide amenities and exclusive luxury benefits. An example of a such a credit card is a Privileged credit card from Axis Bank of USA. It provides for exclusive benefits of discounts on bookings of airport’s and railway’s tickets, dining facilities and other related travelling packages. Rewards are maximized through miles and other airport’s services using two credit cards from the same bank. Travelers can use their other credit card of the same bank to do shopping and other related regular payments of billing and other miscellaneous services.
It is also beneficial for the users to hold two credit cards from the same bank as the banks provide for a zero percent introductory APR as well as a zero annual fee. This provides for a special concessionary benefit.
In order to have two credit cards from the same bank, it is mandatory for the card holder to gain an access to the data for establishing credit history and scoring. Providing for credit history to avail the services of the multiple credit cards of the same bank require one to prove his strong credit worthiness.
Rewards Obtained From Having Two Credit Cards From The Same Bank
The rewards of owning and using two credit cards from the same bank are enormous. The rewards help to cash the benefits associated with these. These rewards indicate that it is beneficial for the users to hold two credit cards from the same bank. The rewards comprise the following:
Chase Ultimate Rewards:
Chase Freedom Unlimited and Chase Freedom Flex are two major credit cards offered from banks of America. These two credit cards can be obtained from a single bank at a time. These help the user to obtain financial concessions. These require no annual fees, and are actually free to own. Chase Freedom Unlimited helps to obtain travelling benefits by enabling the users to obtain 5% allowance through Ultimate Rewards portal. Besides, concession is offered on drugstores and restaurants by using this card.
Chase Freedom Flex is another credit card, which provides for concessions on utility bills. Rewards are redeemed as bonus amounts and these could be used for obtaining concession on different services. There is also an example of Ink Business Cash Credit Card, which offers no annual fees and provide for a bonus of cash back in selected business categories. These are related to the travelling industry like discounts on shopping on airports, and bookings for tickets.
American Express Membership Rewards:
American Express Membership Rewards are obtained on American Express Gold Card and Platinum Card from American Express. They can be redeemed towards purchases of travelling, purchase of luxury gifts, gift cards, and online shopping made over the internet. This card also provides for airline’s loyalty programs and on partner hotel’s spending. The hotel’s rooms are booked at lower rates possible in fact lower than the market rates. This means the points of the membership cards are redeemed for travelling at a higher rate by owning two credit cards of this nature from the same bank.
Bank Of America Rewards Program:
This rewards program provides for at least a 25-75% greater cash back on the purchase of goods and services using the credit card. Having two credit cards from the same bank of Bank of America, it is possible to avail a variety of rewards in several categories.
Cash rewards of Bank of America enable the multiple credit card holders to earn 3% of cash rewards or cash back for transactions made in categories like online shopping, payment of utility bills, pharmaceuticals or drugstores, dining, travelling and other home based accessories. This also provides for cash back on the wholesale shopping and grocery stores.
Citi Reward Points:
Points of the Citi card are usually 25 percent greater when redeemed for travelling specifically. This card is most commonly used by the businessmen running multiple business units.
Having Two Credit Cards From The Same Bank For Businessmen
The businessmen, which run multiple businesses can find it useful and profitable to hold two credit cards from the same bank. These help to provide for maintaining an account of the profit and loss separately and easily for the multiple business units, and expenditure could be incurred using two different credit cards separately.
Special Benefits Of Having Two Credit Cards From The Same Bank
Having a second credit card from the same bank provides an entitlement to different concessions on airports, insurance of the baggage, amount if any required for trip’s reimbursement. Even holding two credit cards of the same bank provides an opportunity to provide for mobile’s insurance.
Major Drawbacks Of Holding Two Credit Cards From The Same Bank
It may not be possible to transfer balance between two or more credit cards from the same issuer. It creates hassle and problems as it could get one stuck regarding balance of your original account. This can be used to lower the APR credit card limit.
Any single problem prevalent with a single account of credit card of a user from a single bank can disrupt the functioning of the other credit card as well. Any delay in payment on one credit card can block the functioning of the other credit card. Any cases of identity theft can lock one out of all of the accounts while into investigation of the issue of the theft or the financial loss.
The credit limit helps to increase the credit score of the lenders related to the unsecured credit. In an event of applying for a home based loan or in other words mortgage loan, the user of the credit card having two credit cards from the same bank will have to wait for a few months when replying about giving an approval of the second credit card’s application. This means the delay in the process of seeking the second credit card can slow down business activities.
Restrictions For Application Of Multiple Credit Cards
Usually there is a restriction on the apply and drop strategy of the application of two credit cards from the same bank. Cracking down on approvals of two credit cards from the same bank is becoming increasingly common especially amidst low credit scoring or any other one requirement of the user being not met on time. If a user is found to be least liquid related to bank’s funding, then it is likely that the bank manager may reject the application of applying for two credit cards from the same bank. Submission of required documents later than the specified deadline of the bank for application of two credit cards can also reject issuance of two credit cards from the same bank.
Conclusion And Recommendations
Overall, it is safe to conclude that owning two credit cards from the same bank have its own benefits and drawbacks. The user of the bank having two credit cards of the same bank can well avail different benefits and rewards while conducting transactions in different areas such as business, retail, grocery, airport and travelling, hotel bookings etc. Special discounts and concessions can be offered while doing shopping in different areas. However, the hassle grows while owning two credit cards from the same bank like any case of reported theft or other scam on one credit card can lead to blockage of two cards together. This means the customer holding two credit cards can be deprived from financial utility of the bank for some time till the time the problem does not get resolved.
The recommendation is that the businessmen aiming to open multiple businesses can resort to having two credit cards at the same time. Those who are facing a financial urgency can look for application of two credit cards from the same bank. A person looking for making a large transaction can opt for using two credit cards from the same bank. This will enable one to be financially liquid at one specific time. In order to avoid the above mentioned drawbacks associated with obtaining two credit cards from the same bank, it can be asserted that a user may obtain the second credit card from some other bank. For being financially liquid in times of emergency and to avail perks not offered by one specific bank, it is advisable to obtain the second credit card from some other bank. Diversification is at times recommended in case of obtaining the second credit card from some other bank.