While many praise the benefits of having multiple credit cards, there’s something to be said about having just one. Entrepreneurs and CEOs alike all stand to benefit from having only one credit card. The following pros make a case for ditching multiple cards to use just one:
1. Avoid Paying Multiple Credit Card Bills
Business ownership is challenging enough on its own without the threat of potential debt that comes with multiple credit cards. Business owners that prefer to keep their finances simple should stick to using one credit card. With only one credit card, CEO’s can charge all their business expenses to their one business credit card, making it easy to keep track of how much they spend each month.
Alamo Associates reminds CEOs that instead of having to stay on top of multiple credit card bills when it comes time to pay off the balance, using one credit card will make paying it off that much easier. For CEOs that already have several open credit card accounts, Alamo Associates recommends transitioning to just one credit card by compiling all credit card bills into one monthly bill with low-interest rates.
2. Make Taxes Effortless
Business owners that hope to take advantage of tax deductions during tax season need to keep detailed records of their finances. With more than one credit card, handling one’s taxes can become incredibly difficult. In many situations, CEOs may miss opportunities for a write off if they use more than one card.
This is especially true for small business owners that have to keep track of their own finances as managing multiple cards can be overwhelming. With just one credit card, compiling your tax deductions is as easy as reviewing each year’s monthly statements.
3. Avoid Credit Card Pitfalls
Many people choose to carry multiple credit cards in the hopes that they’ll benefit from all the rewards. However, many credit cardholders overwhelm themselves trying to spend enough money on multiple cards to take advantage of the cash back rewards. With most cards requiring a minimum of $2,000 a month to qualify for cash back rewards, trying to charge this amount to multiple cards can be taxing, especially if you fail to pay off your card in full each month.
In the situation that you aren’t able to pay off your balance in full or you are late on a payment, each credit card you use will have a negative effect on your finance. Avoid high-interest rates and late fees by taking advantage of the rewards of just one credit card.
4. Multiple Cards Can Ruin Your Credit Score
While many CEOs open up multiple lines of credit as a way to boost their credit score, this is a risky situation if it isn’t managed properly. Though having credit can technically increase your credit score, maxing these cards out will have a negative impact on your score. Avoid hurting your credit score by limiting the amount of available credit you have to just one credit card. This way, you’ll avoid the temptation of spending more money than you should.
Avoid the pitfalls of credit card use by sticking to the one-credit-card lifestyle. This way, you’ll be able to keep a healthy credit score without inadvertently signing up for thousands of dollars worth of credit card debt
