Is it Better to Have More Than One Credit Card in the UAE?

Pros of Having More than one Credit Cards in the UAE

If you’re confident enough in managing your money, multiple credit cards may be beneficial for you.  Let’s understand the perks of using  more than one card–

• Utilization Ratio: Spending most of your card limit can affect your credit Score negatively. However, multiple cards means a higher total limit. This way, you can keep your spens under 30% of the limit and boost your credit score.
• Credit Score Build-Up: Customers with multiple cards have a good credit score if they pay their bills on time. A good credit score will, in turn, give them opportunities to receive good credit in the future.
• Benefits and Rewards: If you pick your cards right, you can enjoy the maximum benefits of your cards. It is essential that you pick the right cards. Choose  a  card depending on the type of purchase you make. If you want multiple cards, select cards  based on the rewards they offer.
• Credit Limit: Maintaining a good record of the cards that you own will reward you with an increased credit limit.
• Emergency Fund: You may need cash urgently, such as during a medical emergency. In such circumstances, you can access funds from several cards without relying on a single card. Backup: One of the most important uses of multiple swipe cards is the safety net it provides. There are situations where a customer loses their card or becomes a victim of theft. Or the bank might block the card due to certain reasons. Imagine a situation when you are on a holiday and you get stuck financially. In that case, even if something happens to one card, you can use the other one. You won’t have to worry about being stuck in a foreign land with no financial help. You can continue using your other card and enjoy your holiday.

Cons of Having More than one Credit Cards in the UAE

Just like every other situation, every pro has a con. Having more than one card can sometimes have negative effects too. These cons are:

• Management Issue: Having multiple cards can be hard to manage. You will have to pay heed to the billing cycle, payment dates, credit limit, etc. Your credit score will have a negative effect if you miss out on any one of the important factors.
• Increase in Credit Limit, increase in expenditure: This point goes hand-in-hand with management.  Increase in the credit limit can make some card members give in to their urges and let go. The increase of credit limit can make some card members lose track of their expenditures, hence spending more than they can/should.
• Debt: Negligence or incompetence will lead you straight to a financial crisis in the form of debt. If you fail to manage your cards, debt is what you will be heading to.

Things to Watch out for when you Have Multiple Cards

• Leave the older swipe cards open: If you are applying for a new credit  card, it would be advantageous for you to not close the older ones. Older cards have a long history, thereby having a tremendous effect on your credit score.
• If you close down your old card, your credit score will see major changes too.
• Avoid letting your card become inactive: It is easy for a card to remain unused when you have multiple cards, rendering it inactive. And that should not happen.
• When you have multiple cards, make sure to use all of them. Make sure to use the unused card once in a while at least. Avoid letting the card become inactive as it will affect your credit score too.
• Don't open new accounts to build the credit score: If you want to get a new card just to build your credit score, don’t. Getting new cards to build your credit score is never a good idea. It is all about how you manage the cards.
• If you use your card prudently, you can build a good credit report with only one card, too.
• Keep an eye on your debt: Mismanagement of the cards you own can lead to debt. Hence, be careful with your debts. It is advisable to pay off the debt as soon as you can. Don’t take on more credit before paying off the debt.
• It is all about timing: When you opt for a credit card, always leave a gap between applications. Avoid applying for cards within a short period of time. Doing so would have a negative impact on your credit score.
  Also, if you are planning to apply for any type of loan, it could lead to unfavorable terms for you.

How to Manage Multiple Charge Cards?

It is wrong to assume that having more than one card will harm your credit score. Swiping your credit cards within every few weeks will affect your credit report positively. However, you should pay attention to the following pointers to reap maximum benefits from your cards.

• Bill Payment on Time: Paying your bill on time is important. But when it comes to managing multiple cards, the different payment dates can be a bit hard to keep track ofTo avoid missing out on payments, you can set up automatic payments. This will save you from late fees for the delayed payments. Also, save your credit score from getting affected.
• Stay Within your Credit Limit: If you have more than one card, try to keep your spends under 30% on each card. Don't go overboard with the credit limit.
• First time user: First-time users should learn how to manage their card before adding additional cards. It would be better for the first-time user to wait at least a year and learn how to manage.
  Can I Apply for More than one Credit Card at Once?

Yes, you can apply for more than one credit card. However, it is essential to manage those cards smartly to avoid any financial stress. Note that-

• Credit report plays a major role when applying for multiple charge cards
• Each credit card comes with its own set of benefits
• Maintaining a positive track record would result in the banks approving more than one charge cards

Over to You

In simple terms, the number of credit cards to have depends on your ability to manage them.. If you are good with management, wisely using your cards gives you several perks. However, if you lack control and management strategy, even one credit card can lead you to debt.