I prefer to keep my banks at arm’s length. They can see from my credit report that I have accounts elsewhere, and they’re one minor inconvenience away from losing me as a customer. And I like it that way.
Having multiple banks protects you in case Chase shuts down or if their system crashes. This happened to me in June when all of my cards stopped working while I was on vacation, including my debit card. I only got back because I had other cards and accounts with money in them.
NEVER depend solely on one institution.
Don’t put all your assets in one basket; it can break and leave you in a big mess.
Don’t show loyalty to banks; they’re not loyal to you and only see you as a number.
In addition to mitigating risk, having cards with different issuers can lead to higher combined limits since each issuer limits their exposure to just their cards.
Moreover, having cards from multiple lenders allows you to earn points/money from various welcome bonuses, which is where the real value lies. This is a more advanced strategy, but you can learn about it at r/churning.
Is it better to have all your eggs in one basket or spread them out?
I heard it’s useful to have cards from multiple banks due to the potential for a fraud issue that might cause a bank to lock all your cards. I haven’t experienced this, but it seems possible.
Both approaches have merit. Having cards from multiple banks builds relationships within your credit profile, while having multiple cards from one bank simplifies points accumulation and management. With Chase, for instance, you can transfer points between cards, making it more effective for earning and redeeming rewards.
Limiting yourself to just one bank’s cards restricts you from utilizing all the other banks’ transfer partners. Amex has numerous valuable transfer partners not available through Chase, especially for overseas travel.
Without significant spending, your primary source of points will be limited to welcome bonuses, and you’ll run out of those quickly.
In addition to what others mentioned, there are various credit card “ecosystems.” Chase UR points do not equal AmEx MR points, which are also different from Citi Thank You points and Capital One miles. They have distinct transfer partners and redemption methods.
Some transfer partners overlap; for instance, both Amex and Chase transfer to Air France/KLM Flying Blue. You could obtain sign-up bonuses from both the AmEx Gold and the Chase Sapphire Preferred, then combine those points when transferring to Air France/KLM. This could yield enough points for a trip from the US to Europe. Plus, sometimes the sign-up bonuses are even elevated.
While I don’t necessarily recommend this, it’s advantageous if you intend to play the 0% balance transfer game.
Denim said:
While I don’t necessarily recommend this, it’s advantageous if you intend to play the 0% balance transfer game.
What does that mean?
Denim said:
While I don’t necessarily recommend this, it’s advantageous if you intend to play the 0% balance transfer game.
What does that mean?
Some banks/cards offer 0% deals for a limited period when you transfer your credit card balance to them. For instance, if you have a $1000 balance with Chase, Bank of America might provide a 0% rate for 12 months for that transferred balance, hoping you won’t pay it off in time for them to earn interest later. When the period ends, if you haven’t repaid the balance, you can transfer it again (assuming offers are available). Typically, there’s a 3-5% fee for the transfer. I frequently conduct balance transfers with BoA, Barclays, and Citi.
Denim said:
While I don’t necessarily recommend this, it’s advantageous if you intend to play the 0% balance transfer game.
What does that mean?
Many balance transfer offers are given when signing up for cards, but issuers may also extend them to current customers.
If you want to take advantage of balance transfer offers, you need to use a different bank. You cannot transfer balances within the same bank.
Valentine said:
If you want to take advantage of balance transfer offers, you need to use a different bank. You cannot transfer balances within the same bank.
Can you explain what that means?
Valentine said:
If you want to take advantage of balance transfer offers, you need to use a different bank. You cannot transfer balances within the same bank.
Not OP, but you can. I came across a post where someone transferred between Chase cards, and they were fully aware yet allowed it, which inspired me to do the same.
#Multiple
There’s nothing wrong with having credit cards from different banks. I believe you should at least have cards from your primary bank (most likely Mastercard and/or Visa), as well as an AMEX and a Discover card. This way, you cover all your bases.
I once had all my accounts with one bank, and it was seized by the FDIC while I was on vacation. Not a fun experience! (The bank was taken over, not specifically my accounts.)
I refuse to have a personal credit card with the same bank as my personal checking account. I prefer to keep them separate and use multiple banks for my credit cards. Since I focus on cash-back and not travel points, this arrangement suits me well. I recognize that logging into many different accounts can be annoying, but many banks can be unethical and wield considerable power. Hence, I want to mitigate my risk in case anything unusual happens.
I just use cards from banks that best fit my needs. Currently, I have 3 Citi Custom Cash and 3 BoA CCRs. I also maintain cards from other issuers for redundancy in case any one of them gets shut down. I don’t stress about having multiple cards from the same issuer because I’m focused on maximizing my benefits.
As long as you don’t act irresponsibly, you shouldn’t run into problems having many cards. However, you might reach a limit on your total credit exposure.