6 reasons why you should have more than one credit card in your wallet

Credit cards are often criticized for causing interest on everyday purchases. This is only true if your monthly balance is not paid off. Credit cards are a great way for those who can pay off their monthly statement, to get valuable rewards, to enjoy travel benefits, and to have peace of mind while making purchases.

In the last 10 years I have used my credit card rewards to travel around the world, visiting over 40 countries and innumerable cities. I've also been able to fly business class for many of these trips, with only minimal out-of pocket expenses.

You may want more than one card for reasons other than travel. You can get access to a variety of purchase protections and it may even help improve your credit score. Let's look at a few reasons why you might want to carry more than one card.

Travel rewards or cashback: Maximize your travel rewards

Credit card competition is fierce, which is great for consumers. US consumers can choose from hundreds of credit cards that earn rewards. These cards offer different bonus categories, such as dining, food delivery, grocery, travel, and gas.

Using the right cards can help you earn more points per dollar on your purchases. You can use this to accelerate your progress towards your next big redemption.

Look at your credit card spending to see where you are most likely to spend money. Find a few cards that offer bonus points for these purchases. Find a card that earns you more than one point per dollar spent on all purchases.

This is a list of my credit cards and the earnings rate I get for each one. Many of the cards listed may also have bonus categories.

American Express Gold Card: Earn 4 points for every dollar spent at restaurants and supermarkets in the U.S. (up to $25k per year; thereafter, 1 point per $1). Chase Sapphire Reserve (r): Earn 3 points for every dollar spent on travel and 10 points for each dollar spent on Lyft rides. The Platinum Card (r) from American Express offers 5 points for every dollar spent on flights booked directly through the airline or via amextravel.com.com. After $500,000, 1 point is awarded per dollar. Bilt Mastercard (r): 1 point for every dollar spent on rent up to $50,000 per annum. Rent is free (see fees and rates). American Express Blue Business Plus Credit Card: Earn 2 points for every dollar spent (up to $50,000 per annum, after that 1 point). No annual fee.

Rent is the only category that I earn 1 point for every dollar spent. The Bilt Mastercard is still a better option because it does not charge fees.

Don't forget to check out the welcome bonuses offered by many credit cards that earn rewards. These offer a certain amount of points if you meet a minimum spending requirement. Amex Gold, for example, offers 60,000 bonus point after spending $4,000 in the first six months. One or two welcome bonuses can be enough to fund your next vacation.

You can also make a credit card stack with no annual fees.

My credit card stack, of course, isn't right for everyone. Three of these cards charge high annual fees that are offset in part by the benefits they offer, such as airport lounge access and travel credits. These benefits can be maximized with frequent travel. However, you should do the math before applying for a credit card.

You don't need to pay an annual fee to maximize your rewards for everyday spending. This is a great no-annual-fee credit card stack to maximize major purchase categories such as dining, groceries, and more.

Bilt Mastercard (r): Earn 1 point for every dollar spent on rent (upto $50,000 per annum), 2 points for every dollar spent on travel (when booking directly with an airline or hotel, or a cruise company), and 3 points for each dollar spent on dining. American Express Blue Cash Everyday (r) Card: Up to $6,000 in cash back per year at U.S. supermarkets, up to $6,000 for gas stations, and up to $6,000 for online purchases. No annual fee. (See rates and fees). Citi(r) Dual Cash Card: Get 2% back in cash on all purchases (1 % when you spend and 1% when paying). No annual fee.

With this stack you can earn flexible Bilt Rewards on your travel, dining and rent expenses. You'll also get 3% cashback on most popular categories of spending with Blue Cash Everyday and 2% everywhere else with Citi Double Cash.

Browse our guides on the best credit cards with no annual fees and the best credit cards without an annual fee to get ideas for building your credit card stack. When choosing cards, consider where you spend most so that you can choose cards with the best bonus categories.

During my five years of award travel, I have learned that the value of points and miles does not increase. Over time, airlines, credit card companies and hotels devalue their points by increasing redemption costs or eliminating some redemptions. To that end, I try to earn flexible points while diversifying the rewards I receive.

Programs like American Express Membership Rewards (also known as Bilt Rewards), Chase Ultimate Rewards (also known as Chase Ultimate Rewards), and Bilt Rewards are all flexible travel reward currencies. For each of these currencies, I have over 10 travel partners to which I can transfer points. You can transfer Bilt Points to Air Canada Aeroplan (AAdvantage), United MileagePlus (World of Hyatt), American AAdvantage and many others.

So, I am covered in the event that a loyalty program lowers its value. You can book the same ticket for a lower price by transferring your Bilt points to Air Canada Aeroplan, one of United's partners. If I had put all my purchases on a United Credit Card, this wouldn't have been possible.

You'll see that my credit cards earn points in different currencies. Each transferable point program has different partners. I have more options when booking travels because I can choose from multiple flexible point currencies.

More benefits and protections

Many credit cards also offer benefits. Many premium credit cards offer airport lounge access, priority board and free checked baggage. Other benefits include rental car damage waivers, purchase protection and other travel and purchase protections. You can save thousands of dollars by knowing how to take advantage of these benefits. However, benefits will vary from card to card.

Many of these benefits are important to me as a frequent traveler. Amex Platinum, for example, allows me to use airport lounges while traveling and guarantee Marriott and Hilton elite membership. You can maximize the statement credits you receive, such as the monthly Uber Cash and annual airline fee credit.

Since I am a frequent Delta flyer, I keep my Delta SkyMiles Reserve American Express Card with me to get priority upgrade on domestic flights as well as bonus Medallion Qualifying Miles. This card is rarely used unless it's to accelerate my elite status.

The Sapphire Reserve is also a great travel insurance. I have saved hundreds of dollars with its trip delay coverage, which reimburses travel expenses after a 6+ hour delay. It covers things like hotel stays, food and taxis. This insurance is very valuable for me, as I travel a lot. You must charge your travels to the Sapphire Reserve in order to receive the benefits.

Chase's Purchase Protection can be useful when purchasing expensive items. This protection is included in most Chase credit cards, including the Sapphire Preferred Card and Chase Sapphire Reserve. The card covers eligible items against theft, loss and damage within the first 120-days of the purchase date, up to a maximum of $500 per claim, and $50,000 per account.

Many Chase cards also offer extended warranties. This coverage will extend the manufacturer's warranties by one year for eligible warranties that are three years old or less. The maximum claim is $50,000, and it can be up to $10,000. You could save thousands on expensive items such as laptops or camera equipment if they break down after the warranty has expired.

When I buy travel, or anything else, I carefully consider which credit card offers the best points, benefits, and purchase protections. When I travel, I always make sure to bring my Amex Platinum card and other cards that offer a lot of benefits with me.

Travel with extra credit cards to protect yourself

You should always have a second credit card with you, no matter where or when you travel.

It is impossible to predict when your credit card may be stolen, damaged or rendered unusable while on the road. You can avoid being stuck in a situation where your credit card is not available while you wait to receive a replacement by carrying an extra card.

You can add an extra layer of security by leaving this credit card in a backpack, hotel safe, or someplace other than your everyday wallet. You can still use your credit card if you lose your wallet or purse while traveling.

If you use American Express or Discover cards primarily in the United States, you should also get a second card that uses the Visa or Mastercard network before traveling abroad. Amex and Discover cards aren't accepted as widely in many countries. You may have to use local currency or a debit card.

Consider applying for an extra credit card to take with you if you frequently travel abroad. This credit card will not charge you foreign transaction fees. Bilt Mastercard, Capital One VentureOne rewards card and Capital One VentureOne do not charge foreign transaction fees.

Credit score improvement is possible

Multiple credit cards can also improve your score. You may initially see a negative impact on your score when you open a credit card. However, over time your score will recover and improve as long as you make all payments for your credit cards in full and on time.

You can increase your credit limit by opening a new credit card. Credit utilization is lower the less credit you utilize. It is usually viewed as a good thing for your score. Plus, keeping the card open for a long time can increase your credit history. Paying your card on time will also help you build your payment history. All of these things can help you achieve a higher credit score in the future.

Pay your credit cards on time. If you do not pay on time, your lender may report the missed payment to credit bureaus. This can have a negative impact on your credit. You may also accrue late fees and interest, which can eat into any rewards you receive from your credit card.

You might find it easier to track your expenses

It's much easier to keep track of my monthly expenses when I use different credit cards for each category. Checking my Amex Gold statement will show me how much I spent on dining and groceries. If I want to know how much I spent on Lyft and public transport, I can check my Sapphire Reserve statement.

There are many ways you can track your spending and adhere to a plan (or budget). It is convenient to be able track my spending by category with the bank app on my smartphone. This, combined with an Excel sheet, is how I've tracked my finances over the years.

It works especially well if you budget using the envelope method. You allocate a certain amount to each category of expenses every month. Imagine your credit cards as envelopes that you can only use a certain amount of money on each month. Your bank may be able set up text alerts that notify you when you spend a certain amount of money on your credit cards.

It's true that this method is not for everyone. You have to stick to your budget in order to see the results. If your brain is like mine, it might be easier for you to track your spending when you use different cards for different purchases.

Bottom Line

Multiple credits have many advantages. Travelers like me can accelerate their points balances and reach free trips faster by earning the maximum travel rewards for every dollar spent. Airport lounge access and other benefits make business and leisure trips more enjoyable.

Even if you do not travel often, having multiple credit cards is a good idea. You can build credit and earn as much cash back as possible, without having to pay an annual fee.

Please click here to view the rates and fees for the Delta SkyMiles reserve card.