Should I get a second credit card?

When used responsibly, there can be a lot of advantages to having multiple credit cards. 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:

• Whether you should get a second credit card depends on your needs and circumstances.

• Before applying for a second credit card, it might help to compare card terms, fees and rewards.

• Using credit cards responsibly can help you build credit and improve your credit scores. Responsible use includes paying on time and keeping your credit utilization ratio low.

• Checking whether you’re pre-approved for credit card offers can help you avoid unnecessary hard credit inquiries.

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:

• 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.

• You want to maximize rewards: A rewards credit card lets you earn cash, miles or points on eligible purchases you make with the card. The best type of credit card is one that aligns with your spending habits and goals. For example, if you’re planning a dream vacation, a travel rewards credit card might be the right fit. 

• 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.

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: 

• Review the card’s APRs: If a card offers an introductory APR, it’s important to know when the promotional rate ends. A penalty APR may kick in if you do things like miss a payment. And there may be different APRs for things like cash advances and balance transfers.

• 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 it.
• Understand the card’s rewards structure: Some credit cards offer elevated rewards on things such as 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.

Before you apply for a second credit card, you may want to take a few steps before you apply.

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.

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.

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.

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 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. Doing so 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 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.

Here are a few frequently asked questions about when to consider a second credit card and what to expect when you apply.

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 it won’t hurt your credit scores.