Credit Card: What happens if you apply for two credit cards in the same month? People apply because they are tempted by the offers..

In today's world, a credit card is no longer just a luxury but a necessity. Driven by the allure of online shopping, EMIs, cashback, and rewards, many people apply for more than one card at a time. This is especially true when banks themselves call and offer cards, making it difficult to refuse.

But did you know that getting two credit cards in the same month can be dangerous for your financial profile? The effects aren't immediate, but they gradually become apparent, and sometimes the damage is only realized when a loan application is rejected.

Direct Impact on Credit Score

Whenever you apply for a credit card, the bank checks your credit score. This is called a hard inquiry. Applying for two cards in one month results in two hard inquiries.

The consequence is that your credit score can drop by a few points. If your score is already on the borderline, this drop can be even more detrimental.

Banks Perceive Financial Desperation
When someone applies for multiple credit products in a short period, banks view it as a risk. They perceive that the customer is suddenly in urgent need of money. This is considered "credit-hungry behavior." This can negatively impact your profile in the future, even if you pay your bills on time.

Increased Credit Limit, but Also Increased Risk
Getting two credit cards increases your total credit limit. This sounds good, but this is where the real problem begins. If you start using the increased limit excessively, your credit utilization ratio increases. A utilization ratio of more than 30 percent is considered poor and further lowers your score.

Impact on Future Loans
Your credit score isn't limited to just credit cards. This same score is used for home loans, car loans, and personal loans in the future. If your score drops:

Your loan application may be rejected.
You may have to pay higher interest rates.
You may receive a smaller loan amount.
Many people only realize their mistake at this point, but by then, it's too late. 

Is it harmful for everyone?
Taking out two credit cards isn't necessarily wrong for everyone. If you have a good income, a strong credit history, and pay your bills on time, the impact may be limited. However, for new users or those with a credit score around 700, this step is considered risky. It's best to avoid applying for two cards in the same month because even with a high income, the hard inquiries will still affect your credit score.

What's the right approach?
If you need more than one credit card, some planning is necessary.

Maintain a gap of at least 3-6 months between applying for two cards.
Build a strong payment history with your first card.
Don't overuse your credit limit.
Don't apply just for the sake of free offers.

Disclaimer: This content has been sourced and edited from Dainik Jagran. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.