As part of the Debt Panel, The National published an article on debt concerns of a Dubai bride and Ambareen Musa’s response on how she can handle the issue.
I earn Dh10,000 a month but have outstanding debts of Dh40,000 on my three credit cards. I want to pay them off as soon as possible. I am living hand-to-mouth and the credit card payments are not allowing me to save. I built up the debt because of some random shopping I did for myself and my family during my wedding period this April. I was using balance transfers as an option [to reduce the interest rate] but I couldn’t resist spending on one card after the balance had been transferred to another.
Here is what one of the debt panellist – Ambareen Musa had to say:
It’s great that you’re eager to settle your debts, but making minimum payments on your credit cards is far from the ideal solution.
Making a low minimum payment every month may seem like a quick-fix but as you prolong repayment, the debt will only grow larger. Average annual interest rates (APR) on credit cards in the UAE hover around 40 per cent. So the longer you take to repay, the more the interest accrues, and this can quite possibly turn into a vicious cycle of debt. While it’s good to have some emergency savings on the side, your first focus should be to get rid of the debt.
For full article go to The National