Looking for the best rates on balance transfers, spending and holiday cash? Taking out a number of cards may be the solution. 
What do you look for in a credit card? Perhaps you want a long interest-free balance-transfer deal to help take the sting out of your current debts.
Or maybe you’d rather have a card with a permanently low interest rate on new purchases so you can splash out every now and again without it costing the earth.
If you spend a lot of time abroad, your priority could be a credit card with competitive foreign usage fees.
For most of us a card which offered all three of these benefits would be ideal. Unfortunately, life isn’t like that and there normally has to be a trade-off.
That cheap balance-transfer card probably charges high interest rates on spending, while a card with lower rates might turn out to be extra expensive when you use it on holiday.
The solution to your problem
But if you can’t find a particular card that offers all the features you’re looking for, don’t despair: there is nothing to stop you signing up with more than one lender.
Depending on your needs, having two, three or even four credit cards that you use at different times or in different circumstances can be a good idea and can save you a lot of money in the form of interest charges and foreign-usage fees.
Chris Griffiths, head of cards at Confused.com, says: “There is rarely a one-size-fits-all answer when it comes to using credit cards, as often a card which is great for one thing may be poor for another.”
Best for balance transfers
If you’ve built up a sizeable debt on your current card, you might be struggling to meet your repayments as the interest charges mount.
One solution is to move what you owe to a balance-transfer card that charges no interest for a fixed period.
For example the Barclaycard Platinum Card has a 0 per cent balance-transfer period of 20 months. It also offers interest-free spending, but only for three months, after which you’ll pay interest of 17.9 per cent a year.
The fee for moving your debt is 3.2 per cent of the total, so if you move £10,000, your fee will be £320.
Best for spending
If you want a longer interest-free spending period, Tesco’s Clubcard charges no interest on purchases for the first 15 months, after which the rate reverts to 16.9 per cent.
Natwest is offering its existing customers a 13-month interest-free deal with reverts to 17.9 per cent at the end of this period. Sainsbury’s has a 12-month 0 per cent deal which reverts to 15.9 per cent.
These cards also offer interest-free balance transfer periods, but none anywhere near as long as Barclaycard’s 20 months.
Best for your holidays
When it comes to a card to use abroad, you want one which charges the lowest foreign exchange fee – this is normally a percentage added to every transaction you make.
Halifax’s Clarity card has no foreign exchange fee, and it does not charge you to take money out of an overseas ATM – although you will be charged interest on withdrawals even if you pay off your bill in full at the first opportunity.
Generally speaking, you’re better off using a debit card for withdrawals wherever you are in the world.
The Post Office also offers a card with no foreign exchange fee.
Best for cashback
If you’re more concerned about rewards, the American Express Platinum offers the most generous cashback deal, with 5 per cent cashback in first three months (up to a £100 limit) then up to 1.25 per cent after that.
The Capital One World MasterCard pays 1 per cent cashback on all your spending. It also offers 0 per cent interest on purchases for the rest of 2011.
A word of warning
There is no reason that having three credit cards, say, is likely to get you into any more trouble than holding a single card provided you use your credit responsibly and understand how to avoid extra charges and fees.
Griffiths says: “Having a few cards to cover your different needs can be a good idea, but it’s important to manage them effectively and not let them encourage you to spend more than you have budgeted for.”
Consider setting up a direct debit to make monthly repayments on every card you own.
You can stipulate that the direct debit pays off either the minimum amount or the full debt that you have run up every month.
Either way, it will ensure you don’t face any late-payment charges, which could damage your credit record.
If your card has a low interest rate for a fixed period, make a note of when that period ends: this is when high interest charges will kick in.
And if you’ve transferred a debt to a zero-interest card, work out a budget to make sure it’s paid off by the time the interest-free period ends.
