How to Properly Cancel a Credit Card in Dubai

By Neha Goyal
  | Published: 20 March 2019 | Last Updated On: 20 July 2021
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It is no secret how much easier life can be with a top credit card in Dubai. From the wide assortment of savings benefits to the ability to purchase products above one’s pay grade, credit cards in UAE have helped create a culture of responsible spending and financial freedom, unlike any other credit instrument. But there comes a time when even the best credit cards in UAE need to be put to rest.

The reasons to part with a faithfully serving credit card in UAE can be many; leaving the country, having found a better credit card in UAE, inability to repay its associated charges, etc. So when it comes to ending the relationship with your credit card issuer, no matter how short or long, this is how one amicably parts ways and terminates their credit card in Dubai.

7 Steps for Credit Card Cancellation In UAE, Dubai

  • Consider the Implications
  • Finish the Leftovers
  • Settle the Bill
  • Write it Down
  • The Return Gift
  • Clearing the Air
  • Wait it Out

By Following these 7 Steps, One May Properly and Completely Cancel their Credit Card in UAE, Dubai 

1. Consider the Implications

The impact of cancelling a credit card in Dubai can be felt on the cardholder’s lifestyle and more importantly on their credit score. The best credit cards in UAE not only let the cardholder access luxury benefits but also allow them to save heavily on their daily expenses. Before cancelling a card, it is important to consider the effect of losing these card benefits.

    Chris standing up holding his daughter Elva 

Similarly, it is important to understand the influence credit cards in Dubai have on the cardholder’s credit score. Long-standing, positive relationships with a credit card in UAE can help boost a person’s credit score enormously. So when it comes to cancelling a credit card in Dubai, it may surprise cardholders to see their credit score negatively impacted even despite having made payments on time and following the correct exiting formalities. This happens because the cardholder is effectively closing a line of credit, i.e. reducing their financial power. Without this boosted financial power, the cardholder is now at greater risk of missing payments, and hence sees a negative impact on their credit score.

Conversely, closing a credit card in Dubai in order to mask a negative history of late or missed payments will not work either. A person’s credit report lasts for years and will continue to display delinquencies in payment despite closing the account. It is far better to maintain regular payments for a couple of billing cycles before deciding to terminate the card.

2. Finish the Leftovers

Some of the best credit cards in UAE offer cardholders incredible rewards and incentives such as air miles, cashback, rewards points and more. Before beginning the cancellation process, it is advised to make full use of all the remaining benefits on the respective credit card in Dubai. Alternatively, cardholders can also consult their bank to figure out if it is possible to transfer these accumulated rewards to another credit card in UAE.

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3. Settle the Bill

Depending on how payments are made for a credit card in UAE, the cardholder may have an outstanding balance they need to settle on their card. All such remaining balances, fees and charges must be settled in full before cancelling any credit card in UAE.

4. Write it Down

After having cleared all the dues on a credit card in Dubai it is time to inform the bank. Banks typically require a written request for termination of any credit card in UAE. This may be done by downloading a card closure form from the issuer’s website, or by contacting the card issuer directly and asking about the exiting process required to close the credit card in UAE.

5. The Return Gift

With all balances settled and the bank informed in writing, it is now the cardholder’s responsibility to return all of the credit cards in their possession. The appropriate way to return a credit card in UAE is to cut it in half and return both halves to the bank.

6. Clearing the Air

The best credit cards in UAE also offer a No Liability Certificate for a small additional fee. The No Liability Certificate is proof that all dues have been cleared and that the cardholder owes nothing more to the bank. This certificate may be required when exiting the country and is also useful in clearing any future liability for the closed account in question.

    Chris standing up holding his daughter Elva 

7. Wait it Out

There is nothing more than the cardholder can do now except wait. Credit cards in UAE require the cardholder to submit a security deposit in exchange for providing them with a credit limit. It takes the bank a minimum of 45 days to ensure that all dues have been cleared, no future payments are scheduled on the credit card in Dubai and to ensure the cardholder isn’t liable to pay any other charges. Once all of this has been confirmed, the bank will return the security deposit amount to the cardholder.

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In a Nutshell

Even the best credit cards in UAE eventually outlive their usefulness. In such situations, it is crucial to ensure proper cancellation of the credit card in UAE in order to avoid any extra charges and interest from accruing on the account.

How do I close a credit card without hurting my credit score?

To close a credit card without hurting your credit score, follow these suggestions:

  • Do not close the oldest credit card: Closing the oldest credit card shortens your credit history which directly hampers your credit score.
  • Clear your debt: Any pending dues on your credit card must be cleared before your credit card can be canceled or else your credit score will be seriously damaged.
  • Confirm with the bank in written: Make sure that all the correspondences including requests and responses with the bank are done in written to avoid any conflicts in future.
  • Check credit report: After your closing a credit card, check your credit card, check your credit report to ensure that the account has been closed otherwise the card may remain active without your knowledge and your credit card will sink due to late or no annual fee payment.
Is it bad to deactivate a credit card in the UAE?

No, if done rightly, there are no repercussions of deactivating your credit card.

 

Should I close my credit card with annual fee?

Before making a decision to close a credit card with annual fee, you must evaluate the benefits of the card and whether you have been able to take advantage of those benefits. If you feel that you are not able to make the most of it, you should close the credit card. However, if the benefits outweigh the annual fee, then do not cancel the card. Remember! A credit card with annual fee usually offers more benefits.

 

Is it better to cancel a credit card or let it expire?

If your credit card is unused and it has a high annual fee, it might be useful for you to cancel the card. However, in case the annual fee is low and you are not using the card, you can keep the card till it expires for various reasons:

  • An unused credit card has low or no debt that contributes to your credit score in the UAE.
  • Besides, a credit card may offer you some shopping discounts or cash back deals which you may miss otherwise.
What happens if you cancel a credit card with an annual fee?

If you cancel a credit card with an annual fee, you may miss on to several benefits offered on your credit card. However, in case the card has a high annual fee and you are not using it, it is wiser to cancel the credit card. You should cancel the card before the due annual fee. If you have already paid the fee, you can make a request at bank to cancel the card and refund the annual fee. The bank may consider your request.