Credit Cards

A credit card allow, you to borrow money from your bank to make your purchase with rewards. Most online purchases and payment can be made by credit cards.

The bank that you received the credit card from keep track of your all purchases, and ensures that all times the amount you owe is below the credit limit that you are approved for. At the end of every month you receive a bill to clear the amount that you have spent using your credit card.

There are different types of credit cards in UAE available. These cards vary on interest rate and are available based on your salary. They each come with different interest rates and offers.

 

Credit Cards in UAE

In UAE a credit card is the most common banking product used by consumers. It makes sense to have credit card, as carrying around cash can be risky at times. A simple credit card can become a great convenience to you and if you know to use it right an interest free. Though if you don’t understand how to use a credit card and you continue to pay the minimum balance you will catch yourself in a financial trap, and end up paying anywhere from 20% to 45% per annum interest.

Eligibility and Documentation

Based upon the latest circular of the UAE Central Bank, you can only be offered a credit card to those that have a monthly income minimum AED 5000. But that is not all to get a credit card.

You are also required to have number of documents.

  • Passport & Visa copy
  • EID (Emirates ID)
  • Salary Certificate / Bank Statement (For specific cases the bank may require additional documents.)
  • Interest and Fees

The interest rates vary on credit cards in UAE based on the bank that you choose and depends on your salary. It is usually around 2.75% – 2.99% which vary bank to bank.

There are annual fees that comes with credit cards. These fees are depends upon the cards category and features/benefits available on the cards. Though there are credit cards free for life also where you do not have to pay any annual fees.

Tips and Tricks

Handling credit card money.

If you have multiple credit cards you may be able to use balance transfer/Easy cash which allows you to take your credit card balance and move it to other bank credit card/account to pay the outstanding.

You are required to pay your credit card outstanding each month which are added up during your billing cycle (the period between bills). A user must aware about his credit card billing and due date.

When receiving your bill you should always pay your balances in full. When you don’t your interest rates can get extremely high. You may find yourself paying much more than you expected at the end of the year. When you completely avoid paying on the due date and neglect even the minimum balance, severe costs are placed on your account and it will be that much more difficult to pay it off completely

If you do not pay your credit card bills you will be faced with damaging your credit history this will make it difficult for you to take further credits from banks such as personal loans etc.