7 Criteria to Consider when Picking a Credit Card in the UAE

Rather than jumping at the first attractive credit card offer in the UAE, we would like to stress the importance of considering the following factors:

Fees & Charges

The first thing to keep in mind is the complete system of fees and charges associated with these so-called free credit cards in the UAE. Many credit card offers in the UAE allow cardholders to redeem their annual membership fee, effectively making the card ‘free’. These annual membership fee waivers are usually contingent on minimum spending requirements and further restricted by caps on reward points earning. Some free credit cards in the UAE even substitute their annual membership fee for a monthly fee or for higher interest rates. Card applicants should carefully consider all associated charges before picking a card.

Outstanding Balance Repayments

One of the costliest aspects of a card, be it a paid or a free credit card in the UAE, is the interest. Cardholders are charged interest on their outstanding balance amount at the end of every billing cycle. This interest can be avoided by paying off the card’s outstanding balance amount in full at the end of every cycle. Cardholders who do not wish to pay off their entire due amount can instead repay a fixed percentage of their outstanding balance, known as the minimum monthly payments for the card. Minimum monthly payments can be as low as 3% of the card’s outstanding balance and should be taken into consideration when picking a card.

Interest Rates

All non-Islamic credit cards charge the cardholder two forms of interest – retail and cash advance interest. Retail interest is charged on all purchases and payments made with the credit card, while cash advance interest is charged on cash withdrawals from machines such as ATMs. Credit card offers in the UAE often mention minimal retail interest rates such as 2.75% or lower. Not that this interest is charged monthly and over the year can amount to as much as 30% or more.

Credit Limit

The most common downside of a free credit card in the UAE is its low credit limit. A credit limit allows cardholders to boost their spending power and instantly access funds that can be repaid at later dates. Free credit cards in the UAE generally offer a smaller credit limit as compared to cards with higher annual fees. Customers with large spending requirements should take the offered credit limit into consideration.

Benefits

From free international round trips to cashback deals and luxury hotel stay discounts, credit card offers in the UAE are nearly limitless in their variety. Depending on what lifestyle perks an applicant is looking for, card benefits can be an excellent tie-breaker when making a comparison of paid and free credit cards in the UAE.

Family Members

Most credit cards allow cardholders to share their credit limit with family members through a supplementary card. In addition to a shared credit limit, many card issuers also give supplementary cardholders access to the same benefits and credit card offers in the UAE that are offered to the primary cardholder. The card’s schedule of charges will contain information on its supplementary card issuance charges and the maximum number of supplementary cards the customer can avail of.

Eligibility

Identifying the perfect paid or free credit card in the UAE is only one half of the story. The applicant will also need to meet the card’s eligibility requirements to qualify for the card. While the eligibility criteria for a free credit card in the UAE are slightly more relaxed than that of a paid card, they may still include a host of factors such as the applicant’s earning power, credit history and even length of employment.

While credit card offers in the UAE may promise the world, it is still advised to consider the associated terms and conditions and whether the card provides an added advantage to the cardholder’s daily lifestyle. Credit card offers in the UAE should not be solely relied upon to judge a card.

Many people make the mistake of opting in for multiple free credit cards in the UAE and as a result, end up over-leveraging themselves. Rather than jumping at every offer for a free credit card in the UAE, It is important to carefully judge the above-mentioned aspects of a credit card and to make comparisons through an unbiased, all-inclusive platform before applying for a card.