Repercussions of Not Making Your Credit Card or Loan Repayments in the UAE

Compare & Apply Credit Cards
  • Airport Lounge
  • Shopping Benefits
  • Fuel benefits
  • Movie Discounts




Best credit cards with 0 Annual fee*


Best credit cards with 0 Annual fee*

  • Dubai
  • Abu Dhabi
  • Sharjah
  • Ras Al Khaimah
  • Ajman
  • Other
  • Cashback up to AED 2,000
  • Rewards + Welcome Offers
  • No Annual Fee
  • Travel benefits
  • Dining Discounts
  • Entertainment Benefits
Looking for Specific ?
Salary range
5,000 AED50,000+ AED
Credit card Banner
Most Popular Credit Card in UAE
Whenever you opt for a personal loan or credit card in UAE, the bank concerned will ask you to submit a blank cheque with your signature (obviously) as a security deposit. There are many countries across the globe where issuing a dud cheque and defaulting on credit card balance or bank loans are considered to be commercial as well as civil offences. Therefore, there is no involvement of civil courts in such matters.

However, the legislative approach for issuing bounced cheques in the Emirates is more complicated as opposed to other advanced and developed nations. The Article 401, UAE Penal Code states that any individual who issues a cheque without a sufficient balance, causing it to be dishonored, may have to face imprisonment starting from one month to 3 years, or a minimum penalty of AED 1,000.

According to the UAE Penal Code, issuing a bounced cheque is considered to be a punishable criminal offence. Hence, a person would be signing his own sentence for imprisonment if he intentionally or unintentionally issues a signed cheque that he would not be able to honor.

And, it doesn’t end here. If he believes that he would be free after serving the jail term for such a lapse, then he is living in a bubble. Even after he finishes the determined jail term, he may still be kept imprisoned till the time his debt is cleared.

Although a dishonored cheque generally entails at least one month to 3 years (maximum) in jail according to the UAE laws, the real picture is entirely different as a debtor would not be released from his financial obligations even after finishing his jail term.

There are many situations where expats who have been imprisoned for issuing dud cheques are still in the local jails even after they complete the jail term prescribed, only because their debts have still not been cleared.

In such cases, it is important for you to keep in mind that a bank will collect a signed cheque in the form of the security deposit during issuing a credit card or personal loan in UAE in order to compel the borrowers in case they default on the repayment of outstanding credit card and loan balance.

Therefore, if the customers are not able to make repayment of their outstanding balance, the whole process will roughly go as described below.

Let us suppose, a borrower becomes a defaulter on a credit card or loan payment. Then, the recovery squad of the bank will begin to hound him and continue to follow-up with him requesting him to make the repayment of the balance immediately. In case the defaulter does not give a positive response, the recovery squad will get the security deposit cheque cleared from the bank.


If the bank account of the borrower does not have a sufficient amount, the cheque will bounce. Depending on the case, the concerned bank will file a criminal case for the cheque bounced. A person with an active criminal case on his name in the UAE is not allowed to leave the Emirates. Moreover, his Visa cannot be transferred or canceled. If he still tries to leave or abscond the country, the immigration authorities will issue a notification for arresting him.

As soon as such an alert has been issued, the defaulter will not be able to enter or leave the country or any other GCC nation without getting arrested. When he gets arrested, he will be sentenced to imprisonment. Even when they complete the jail term, the defaulter will not be free from his financial obligations and will have to serve imprisonment till the time their debt is cleared.

Therefore, we suggest you to be smart and clear all your debts on time. Otherwise, prepare yourself to face the severe consequences.

More From Credit Cards