How to Use a Credit Card Properly in the UAE?

By Saad Bin Shoket
  | Published: 14 June 2019 | Last Updated On: 12 February 2021

Average Rating / 5 (ratings ) | 776 Views
Credit Card in UAE

T&C Apply

Get cashback up to AED 2000

By Clicking on "Proceed", I declare that I am a resident of UAE and holding a valid Visa and agree to the website Privacy Policy and Terms of Use.
With credit facilities come various charges as well as responsibilities. Credit cards are not meant for those who have no control over their spending and are weak-willed. You should be wise as well as thrifty in case you want to own a credit card. With a variety of credit card offers, life has become very easy for the cardholders. You can use the credit cards for daily expenditure, shopping, bill payment, traveling, debt repayment, school fees, and more.

Let us first discuss a few basic concerns that need contemplation before getting a credit card.

  1. Interest Rate: The rate of interest may vary from one provider to another. You must be aware of the rate of interest before obtaining the card. The interest rate charged is based on the credit history, status of employment, or discretion of the bank.
  2. Exchange Rate: You need to be aware of this charge when you travel abroad. Ensure that you have opted for a good foreign spending plan if you are a frequent traveler.
  3. Annual Fee: This fee is charged on your card annually. You should carefully read the terms & conditions before you sign on anything.
  4. Benefits: The credit card issuers generally provide a range of credit card offers for various purposes. You should be aware of the benefits offered and select the card that suits your needs the most.
  5. Minimum Salary: The credit cards require a minimum salary for the applicant for availing them.
  6. Credit Limit: You should know your credit limit which is the limit your bank has agreed to offer you or you qualify for.
  7. Other Charges: Carefully read the fine print and ensure that you are completely aware of all fees & charges.

After you obtain a credit card in UAE, you need to make sure that you are using it wisely. Here a few credit card tricks for the same.

Do not Carry Balance

Make sure you remember this always. Only if you have paid your balance timely and in full each month, you won’t have to bear any interest or charge. In fact, you can earn interest on the cash you had from the time of making a purchase to the time the card statement becomes due. That is almost fifty days in interest gain.

Maintain Clean Card

Let’s consider that you are unable to pay the balance in full each month, however, your total debt is reducing steadily. You wish to enjoy the advantage of the benefits of the credit card but do not want to add to the debt load. In case you have just one card to start with but are only in debt, you must try to first pay that card off before going in for new accounts. However, if you own more than one credit card, there can be a chance of continuing to pay off the existing debt without incurring any interest on fresh purchases. The key to maintaining a clean card is by paying the balance in full monthly.

Know the Closing Date of the Statement

When you are paying your balance in full every month, you get a free loan from the bank starting from the purchasing time to the payment due date of that cycle. The banks offer a grace period for a few days from the date the statement closes and the due date of the bill. It is advised that you make a purchase the day prior to the closing date of the cycle. This way you will have a few days’ time to make payment for it before incurring any interest.

Getting a Big Signing-up Bonus

The people making huge spending earn a lot of rewards every month, however, the rest of you need to be more creative. Banks, in order to find more customers having a good credit score, they have been offering unprecedented joining bonuses for attracting them. As a result, the cardholders having a good credit who are able to wait patiently for an ideal deal enjoy benefits.

Canceling the Card

When you wish to change your credit card, you have a variety of options to choose from. Even those customers having an average credit score may expect their emails to be filled with credit card solicitations. As tempting as it sounds, make sure you do not change your credit card like your clothes. Excessive change of credit cards may harm your credit score. It can also cause difficulty in tracking your spending.

The Closing Thought!

Just like all other businesses, credit card companies also wish to make money. However, sometimes their tactics may involve rules that may exploit the card members. It is advised that you compare credit cards before selecting the one for yourself. Do not use your credit cards blindly. Keep yourself aware of the additional fees that may have to bear. Pay off your balance on time every month so as to avoid interest. Take advantage of the benefits offered so as to ensure that your credit card is acting as a valuable financial tool.