Credit cards are an invaluable tool for managing finances during times of cash crunch. Over the years, they have become an essential part of our lives, thanks to their convenient usage and simple repayment options.
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Very often credit cards with heavy benefits and perks come with a high annual fee in some cases up to AED 1500-2000. Some cardholders consider the high annual fee associated with the credit cards as a result of the perks and benefits the card offers. Contrary to this, some of the cardholders look for cards that come with a minimal annual fee or zero annual fees.
Now the question arises, is it really worth paying an annual fee for credit cards in the UAE? Secondly, how do you assess that you are getting enough value against the paid annual fee?
Before we move ahead and understand the worth of paying credit card annual fees let us quickly understand what is an annual fee when it comes to credit cards.
Credit card providers charge a fee once in a year in return to the services provided and to account for all the perks and benefits offered by the credit card, which is known as the annual fee. Most of the time the major perks and benefits that come along with the credit card are free of cost which is the primary reason why credit card providers issue the card after charging an annual fee.
Based on a general thumb rule that is applicable for most of the credit cards is the higher the benefits, perks, and signup bonuses will higher be the credit card annual fee. In simple terms it can also be said that the benefits offered by credit cards are proportional to the annual fee.
In the beginning when your credit card is issued, the annual fee is typically charged on the last working day of the month in which your card was approved. However, this practice varies from provider to provider and some credit card providers might charge the fee right at the time of account opening.
It is very less likely that the annual fee of the credit card is charged in the form of monthly installments. In case a cardholder cancels the subscription of the credit card the annual fee is usually refundable with a deduction.
There are numerous scenarios where one might end up paying an annual fee for their credit cards. Here’s a rundown.
In a Nutshell
It might appear daunting at first paying an annual fee for a credit card in the UAE, especially if it some hundreds of Dirhams. However, in most cases the annual fee of the cards is justified when it comes to their benefits and rewards. Before choosing the card, it is recommended that one should compare different credit cards online to shortlist and choose cards that fit your budget and suit all your needs.