What are credit cards and how do they work? We explain exactly that in our step by step guide.

[Compare credit cards in Saudi Arabia]

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Types of credit cards

There are two types of credit cards available in Saudi Arabia today:

  • The conventional Credit card: this works like any normal credit card. As a customer, you have a set credit limit which can be used throughout the month. Upon the month’s end, you are required to make a minimum monthly payment towards the amount that you owe the card issuer. This payment is a percentage of the amount owed. So if your minimum payment is 10% on a 5,000 riyal card, you have to pay a minimum of 500 riyals the next month.  The profit is collected based on the balance owed by the customer to the bank. For example, if the balance on your credit card is 4,500 riyals and the bank charges a profit rate of 2.50%, then the profit amount you have to pay is 112.5 riyals. Your total due to the bank is 4,612.5 saudi riyals based on a 4,500 credit card balance plus the profit of 112.5.
  • The Islamic Credit Card: this is similar to a conventional credit card but with one major difference: as a customer, you are required to pay back the entire amount due on the agreed due date at the end of the month. Unlike a conventional credit card, the customer is not allowed to roll over the amount by paying a portion of the outstanding balance on the card. Some Islamic cards allow customers to pay a fixed charge on the remaining balance at the end of every month. This charge remains the same and does not depend on the outstanding balance.

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Who issues cards in Saudi Arabia?

As per SAMA regulations, all Credit cards issued from KSA banks need to be chip and pin compliant by the end of 2015. Q4 2015.  This added security is essential to safe guard the customer from fraudulent transactions. Credit cards are available from Banks or other issuers including American Express, Diners Club etc, which are widely accepted throughout the world.

How can I make payments toward my credit card?

Payments for Credit cards can be made on a monthly basis, with a roll over balance, or as a whole. If customers have a current account with the same bank as their credit card, they can have these linked for automatic partial or whole payments.

Other information you need to know

  • Depending on your customer segment, you may be eligible for one, or multiples of your monthly income as confirmed by your employer.
  • Many credit Cards offer customers features such as plus points, cash-back, exclusive merchant discounts, lounge access, travel insurance and even extended warranty
  • Most banks in Saudi Arabia offer special low limit online shopping credit card as added value proposition
  • Supplementary cards are also available depending on the bank and your eligibility