Our Guide to Credit Cards in UAE
Your credit card is a convenient method to pay for services and good whether it is at retail outlets or online. It is also very useful when travelling especially to pay for hotel stays. Make sure however you can afford to repay back the spending on your credit cards at the end of month to ensure you do not get yourself into debt.
Souqalmal.com allows you to compare over 190 credit cards in the UAE and give you detailed information to enable you to make the right choice for you.
What are the important elements to consider before taking a credit card in the UAE?
1. Interest Rates - Is the rate communicated to you a monthly interest rate or an annual rate? Majority of UAE banks will quote the monthly rate on your credit card. Rates could also vary in some banks based on your monthly salary, your place of employment or even whether you are already a customer of the bank.
2. Salary requirement – what is the minimum salary requirement you need to apply for this credit card? Different types of credit cards in the UAE have different minimum salary requirements. You need to check first of all which cards you are eligible for and accordingly compare the rates, fees and other benefits.
3. Foreign currency rate – how much will you pay on top of the transaction amount if it was a foreign currency? Each time you make a transaction on your credit card outside of the UAE or online in a different currency (from AED), banks will charge you a fee as a percentage of your spend. For example if you are purchasing a bag for USD100 and the FX rate on your credit card is 2% this means you will actually pay the bank USD102. If you are a frequent traveler then you might want to make sure you use the credit card with the lowest foreign currency rate.
4. Annual fee - The annual fee on a credit card would be applicable annually as part of your statement. Some UAE banks advertise no annual fee as a promotion – just make sure you check whether the fee would apply from the second year onwards. Usually, credit cards with annual fees would have more benefits to offer but you would have to calculate whether the benefits you get add up to the annual fee you will pay on the credit card.
5. Rewards - If you are a frequent traveler then you would probably consider taking a credit card that offers you air miles but don’t only look at the earning ratio but also how many miles you need to convert it into an air-ticket. Some credit cards can also come with airport lounge access so search for a card that offers you the lounge that you prefer using the most. However, if you don’t travel a lot but like to save on your transactions, then you might consider a credit card that gives you cash back. You would need to understand if there are any maximum caps in a month or limits on a transaction amount. Also, cashback amounts could vary based on the total amount you spend in a month. There are other rewards you can look for such as shopping vouchers and more.
6. Premium credit cards – Visa International, MasterCard and the different banks in the UAE offer additional benefits on premium cards such as access to airport lounges globally, discounts on dining and shopping around the world, valet parking, free golf and more. You can compare all the benefits on Classic, Silver, Gold, Platinum, Titanium, Infinite and World credit card benefits or you can choose to search for premium cards directly. Premium cards would generally require a higher income or have a higher annual fee.
7. Balance transfers – It is always recommended that you manage your credit card bills in a way where you pay the full outstanding so you avoid paying unnecessary fees. However, if you have a current balance and paying a high interest rate on it, then you are probably considering a credit card with a balance transfer offer – allowing you to pay off your current card and transfer the balance on the new credit card. The offers could vary from 0% interest for 3 months or a low rate for 12 months. While balance transfers generally come with a 0% interest headline, you need to be careful of the processing fees which is a one-time fee you would need to pay in order to enjoy the interest free period.
8. Islamic credit cards: Islamic credit cards can vary in principle, some come with a monthly fee and others with a monthly profit rate. These cards very often still have an annual fee so make sure that you check clearly the fees associated. On Souqalmal.com, you can search and compare all Islamic credit card options in the UAE.
There are over 50 banks in the UAE and between them offer 250 credit cards to choose from. On top of all the requirements and things to consider mentioned above, it is always a good practice to test the customer service of the different banks and look at how payments of credit cards can be done.
If you have an account with the same bank that you have your credit card with, then a standing order might be a good idea so you do not miss any of your payments to your credit card. Remember that not only will you be charged high interest rates but also late payment fees. And on top of that, there is a new credit bureau in the UAE which now takes in all the information from the UAE banks and use it as a reference for future loans and credit cards application.
Different ways you can make repayments on your credit cards:
ATM machine – you can pay off your balance through an ATM machine of the bank – however remember that paying by cheque through an ATM that is not within a branch can take up to 3 days to clear so do not wait till the last day to pay off your credit cards
In the branch – you can walk into any of the branches and pay off your credit cards in the UAE. You just need your account number and deposit the money into your accoun
Online – many UAE banks have online banking and at your convenience you can transfer funds from your account into your credit card accounts at any time. Again remember not to do it on the payment due date but leave a few days in advance
No matter what your lifestyle is and your requirements are, make sure you compare all credit cards in the UAE before you make a choice. Look at all fees and charges and the associated benefits.