Is it Better to Have More Than One Credit Card in the UAE?
There is no definite answer to how many cards you should own. Every individual has different tastes and needs. The number of cards to have depends on your ability to manage the cards.
Being offered the best credit cards should not be your excuse to have more than one credit card. As it is, having one credit card is a big responsibility. Imagine increasing responsibility with the increasing number of plastic money.
Pros of Having More than one Credit Cards in the UAE
For those who have a proper grip on management, having multiple cards can be a benefit. These are some of the benefits of having more than one swipe card in the UAE. These benefits are:
- Utilization Ratio: Spending over 90% of the limit, of the one card that you own, can affect your credit score negatively. However, having multiple cards and spending under 50% of a credit limit, will have a positive impact on your credit score.
- Credit Score Build-Up: Card members with multiple cards will have a good credit score if they pay their bills on time. Good credit score will, in turn, give them opportunities to receive good credits in the future.
- As stated above, it is all about how you manage your cards, regardless of the number of cards you own.
- 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. Pick a plastic card depending on the type of purchase you make. If you want multiple cards, pick 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: In an ideal world, one would not have the need for emergency funds. However, that is not the case. Everyone has a point in their life when they need urgent financial help. You might need funds for a medical emergency, an event, etc. After all, with the high cost of living in the UAE, not everyone can afford to save for rainy days.
- That is when plastic money becomes somewhat like a godsend help. Having more than one swipe card will help lessen the burden on the credit limit.
- 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 become a victim of theft. Or the bank might block the card due to certain reasons. Imagine that situation when you are on holiday.
What do you think will happen if that was the only charge card you had with zero-to-minimum cash in hand? The answer is quite simple. You will be stuck in a foreign land with no money until your swipe card is reinstated. Or you might have to wait for the new card to arrive which can take a few days.
But what if you had more than one card? 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 swipe 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 will 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. We would advise you to pay off the debt as soon as you can. Don’t go for further credit before paying off the debt.
- It is all about the timing: When you opt for a swipe card, always keep a gap between the 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 the score on your credit report. In truth, 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 of.
- To 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.
- 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.
Don’t add to the burden if you haven’t perfected the way of management.
Can I Apply for More than one Credit Card at Once?
There is no law that dictates against the application of more than one swipe card. However, we advise you to be prudent. When dealing with plastic money, it is all about how you manage them.
- 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. There is no holy number when it comes to having a charge card. If you are good with management, you can reap benefits with the various cards you own. However, if you lack control and management strategy, even one credit card can lead you to debt.
Hence, the best credit card in UAE will only benefit you if you know how to make use of it.