Should You Get Two Credit Cards from the Same Issuer?

A credit card is primarily used by consumers as a source of short-term funding and to negate the need of carrying cash. However, most issuers offer multiple credit cards that provide many other perks, such as travel miles rewards and cash back on purchases. It may happen that a consumer who is already using a certain card (say one that has low-interest rates) is interested in getting another one from the same issuer – for example, one that offers reward points on purchases. In this case, is the cardholder eligible for a second card from the same financial institution?

The answer to this question is YES – a consumer can certainly get a second card from the same issuer, provided they meet the qualification criteria. Such an act has its own advantages and disadvantages, a summary of which is given below.

Advantages

If your account is in good standing with your issuer, you may get approval for the second card easily. A second card can also significantly boost your score thanks to the improvement in credit utilization ratio caused by an increase in your available credit limit. Moreover, if your card company offers you a second card without a hard pull of your credit report, you’ll be able to maintain your credit score without sustaining the short-term hit associated with a new application.

Disadvantages

Applying for a second card with the same issuer can have its disadvantages too. If you default on one card, you could trigger the penalty rate, as well as a reduced credit line, on the account in good standing as well. Also, in cases of identity theft, your bank may freeze both your cards while it investigates the issue.

Things to watch out for

Despite being from the same issuer, both your cards may not only have different payment due dates and minimum payments, but you will also have to pay the amounts separately. In case you are mailing your payment, you will need to include the account number on your check and payment coupon from your statement in the envelope. If you are making the payment online, you must select each account separately.

You may not qualify for balance transfer offers from your issuer, as card companies usually provide such cards to new customers only, in order to lure them away from other financial institutions. Also, if you’re interested in the second card just because it offers a hefty sign-up bonus, make sure you read the terms and conditions carefully. Many banks don’t allow existing customers to receive such bonuses, especially if they’ve already received them before.

Lastly, just because the second card is from the same issuer doesn’t mean that you will be approved for the same credit limit or interest rate. These both depend on your current income, as well as current credit standing. There are times when a cardholder may consider applying for a second card with the same issuer because she needs short-term funding and the limit on her first card is not enough to meet the purpose. In this case, if she is approved for the second card, but with a lower credit limit or higher interest rate, it may be a blow to her plans.

A better option in such circumstances would be to approach a different institution that may offer better terms. Or you can call our team at Fund&Grow. Our organization offers individuals with good credit the opportunity to obtain $50,000 - $250,000 of unsecured credit at 0% interest. Available for a period of 6, 12 or 18 months, this amount can be used for anything – from funding a small business, to providing a down payment on a property. If you’re interested, drop us a line, and we’ll talk you through the particulars.