A credit card is a financial institution-issued card that allows you to borrow money from a pre-approved limit to pay for purchases or other expenses. It has the appearance of a rectangular piece of plastic or a metal card. Credit card approval is based on the customer’s credit score and history.
People frequently mix up a debit card and a credit card. The primary distinction between the two is that when you use a debit card, the amount is deducted directly from your bank account. When you swipe a credit card, the amount is deducted from the pre-approved limit. It is critical to keep a good credit score, and the higher the credit score, the higher the credit limit.
A credit card is also used to pay for necessities or to conduct online transactions. After applying for a credit card and borrowing money, make sure you repay the amount borrowed within the time frame specified. While all of this is understandable, most people struggle to manage multiple credit cards. That is why we will discuss it further in this article. Continue reading to learn more.
6 Tips for Managing Multiple Credit Cards in the UAE
The benefits of having a credit card are numerous, and many people keep extra credit cards in order to improve their credit score or obtain additional benefits. Here are some quick tips to help you manage multiple credit cards easily and efficiently.
Limit Balance Carrying
Avoid carrying forward balances from one billing cycle to the next when managing multiple credit cards. The reward cards have high interest rates and can turn into a nightmare if you don’t pay your bills on time. Any interest you pay can be used to offset the value of credit card rewards.
To avoid falling into a debt trap, credit card payments must be made on time. Carrying a credit card balance can put you in a position where your credit score suffers.
Avoid cards with annual fees.
Using a credit card with annual fees to make a purchase can complicate matters later on. Paying annual fees means you’ll be paying more than you would have if you’d made your purchases in cash. If a user chooses no annual fee credit cards in the UAE, they are considered a wise credit card user.
Credit cards with no annual fees are referred to as “free for life” cards. If you find a credit card that is ideal for you but has an annual fee, you can request that your credit card company waive it for you.
Choose the Best Credit Card for Your Purchase
One of the most time-consuming aspects of having multiple credit cards is maximising the reward points. It is critical to consider the features of each credit card. Among the features are fraud protection warranty for travel insurance and many others.
More. When you use your credit card to make a large purchase, you can take advantage of these features.
From travel to shopping, different credit cards cater to the needs of different people.
Air miles credit cards, cash back credit cards, airport lounge access credit cards, travel credit cards, cinema offers credit cards, and balance transfer credit cards are all available in the UAE.
Keep Track of Your Purchases
Keeping track of where you spend your credit money is essential, and it will assist you in paying off your credit balance. To avoid penalty charges and pay off your short-term loan, cut back on spending, and keep track of your monthly statement. If you follow these steps, you will be able to ensure the correct number of transactions and earn bonus rewards from your credit card company.
The best way to manage your money while using a credit card is to create a monthly budget that separates expenses, makes room for savings, includes the credit card payment in the next month’s budget, and tracks credit card statements every month.
Consider the Implications for Your Credit Score
It would be beneficial if you ignored the impact of your credit score on your credit life. When the lender approves the loan, the most important factors to consider are your credit score and credit history, and having a low credit score may make you ineligible for the loans.
A higher CIBIL score indicates a positive credit history and responsible repayment habits. With a good credit score, you can get instant loan approvals, low interest rates, home loans, car loans, and higher credit limits. A CIBIL score of 750 or higher is considered ideal.
Pay Your Bills On Time
Paying off balances each month is essential, but so are monthly payments made before the due date. If you are forgetful, an online bill payment system may be ideal for you, making your payment easier and reducing the likelihood that you will miss your deadline. If you happen to miss a payment, you can always ask your credit card company to waive the fee.
Because it is your first late payment or a new card, the credit card company is frequently obliged. Paying off balances on time can help you avoid penalty charges, which can have a negative impact on your credit score.
