Here’s What Happens If You Don’t Pay Your Credit Card Debt in the UAE?
If you are unable to make your credit card repayments on time then it could be really troublesome for you in the long run and if you live in the UAE then you would definitely have a really tough time.
When you apply for a credit card in UAE, credit card issuers or banks ask for a blank cheque as a commitment for repayment of a credit card. But the main problem begins when you miss your credit card repayment. There are many credit card cases in UAE which show us that you should repay your debts on time.
Credit Card Debt
Whether the reason of missing your credit card bill payment is a medical emergency or a pile of a debt which is more than you can afford, struggling to clear off the credit card debts is a problem that many credit card owners confront. When you stop making your credit card payments, you will be charged a late payment fee or high interest and also take a hit on your credit score. If this continues for a few months, then you would also become another Credit card case in UAE and also might experience certain consequences.
Here are a few consequences of having a credit card debt in the United Arab Emirates.
Calls from Debt Collectors
If you have been consistently missing or avoiding your credit card bills & ignoring payment reminders from the bank then debt collectors will contact you. They will keep contacting you till the time you clear the outstanding dues. First of all, debt collectors start calling you on the bank’s behalf and then begin hounding your office as well as residence to get the overdue payments. They will try their best to persuade you either politely or roughly based on how you deal with them. However, it is always a smart idea to reach an agreement with the respective bank before debt collectors starts calling you.
Deposits of Your Blank Cheques
As said earlier, banks collect blank cheques from the applicant at the time of a credit card application. The respective bank has a full right to deposit that security cheque if even after continuous persuasions; you do not clear your outstanding dues.
But what happens if the cheque bounces?
Once your cheque gets bounced, a police case will be filed against you. In the earlier days, cheque bounce was a criminal offence in the United Arab Emirates, but there are certain changes in the laws that have made a cheque bouncing a civil offense. So, as per the new laws, you won’t be arrested, instead of that you will be have to pay a fine.
Police Case against You
Credit card outstanding dues that have been left unpaid since a very long period of time can come back to threaten you in the form of the police case.
Do you know?
Police & immigration systems are well-connected. So, there are high chances that you might also get stopped at the time of entering or leaving the UAE. There are strict laws in the UAE which includes the credit card non-payment legal action in UAE 2020 makes it even stricter.
However, if in case you leave the country with outstanding debt on your credit card, it is not morally correct that you pay off your debt even from outside the country. Doing this will also certainly help you avoid getting threatened by ‘local debt collectors’ or being stopped at the airport if you ever come back to the UAE or are transiting through it. This will also help you in not coming under the radar of the new credit card non-payment legal action in UAE 2020.
Credit Score Will Be Hampered
The other major consequences of not paying off your credit card debt besides experiencing the debt collectors & police authorities is that your credit score will take a hit. Not only it will hurt your credit score but the unpaid credit card outstanding dues will minimize the chances of availing additional debt in the future as well. Any bank or lender would not be willing to offer you a credit card or any other type of loan with a debt default reflecting on your credit history.
Having a credit card in UAE is a very important financial decision and you need to know how to settle credit card debt in UAE. You should not have long debts on your credit card. Having a credit card with you not only makes easy for you to make purchases without carrying cash but also it helps in building a good credit score. So, this plastic card should not be considered as a free pass to make purchases rather it should be used responsibly so that you can never get trapped into debt. Remember that you should never make a credit card default in UAE as it will help you maintain a good credit score. There are other consequences of becoming a credit card defaulter in UAE. Also, remember how to settle the credit card debt in UAE as it can become very troublesome for you if you don’t know to the process or have a backup plan.