Get Cashback up to AED 2000
Get Cashback up to AED 2000
The only restriction to borrowing with a credit card in Dubai is its credit limit, which is why credit limits are treated as a key criterion for comparison of credit cards in Dubai. However, an enormous credit limit is a double-edged sword that carries with it as much risk as it does reward. While credit cards in Dubai with a large credit limit allow for big purchases, they also pose a drawback of high interest rates and applicable fees. Here are the 7 purchase categories that credit cards in Dubai should be kept away from entirely.
Be it a recurring mortgage or a one-time property down payment, the right credit card in Dubai can seem like the ideal instrument of payment. But cardholders should be wary of making such large expenses on their card. A property payment is an extremely long term expense, one that cannot be broken or dissolved easily. Moreover, most sellers won’t even allow property payments to be made through a credit card in Dubai. Readers should keep this in mind when comparing credit cards in Dubai.
By partnering up with global payment network leaders such as Visa and MasterCard, most credit cards in Dubai effectively push their connectivity to a larger international stage, allowing cardholders to make purchases with the same card locally and internationally. These foreign transactions bear a charge known as Dynamic Currency Conversion, which is conveniently ignored by most when comparing credit cards in Dubai. Dynamic Currency Conversion, as suggested by the name, is a currency conversion feature that most credit cards in Dubai All foreign transactions are converted into AED before being charged. However, these conversion rates are much higher than the standard and end up costing the cardholder a lot.
While having an entrepreneurial spirit is extremely commendable, using a credit card in Dubai to finance a startup is extremely unwise. No matter how strongly one believes in their proposition, startups inherently carry a great deal of risk. Be it a sudden collapse of the market or being unable to find an investor, startups require long term and short term capital alike with no guarantee of return. Readers should avoid comparing credit cards in Dubai with the aim of financing their startup.
Applicants may have come across fuel cash-back cards during their comparison of credit cards in Dubai. These are examples of credit cards in Dubai that reward the cardholder for using their card to purchase fuel. It is important to note, however, that fuel expenses made with a credit card in Dubai normally also carry a surcharge. This additional payment can effectively turn out to be even costlier than the offered cash-back (which is usually restricted to a monthly limit as well).
Depending on the nature of the ailment, medical expenses can range from ones that can be paid directly out-of-wallet to ones that can drain an entire bank account. It is important to avoid paying for large medical expenses with a credit card in Dubai. These expenses can eat up an enormous chunk of the available credit limit. Moreover, if the utilized credit is not paid off in its entirety, it will start accruing high interest amounts, further adding to the cardholder’s debt. Instead, it is advisable to compare credit cards in Dubai for one that offers a complimentary medical insurance policy.
Credit cards in Dubai may offer an Easy Payment Plan, i.e. a monthly instalment plan, for jewellery purchases at select locations. With 0% interest and lengthy tenors, jewellery store EPPs can be extremely lucrative for unknowing cardholders. But note that most jewellers charge an extra fee for credit card transactions that can be 3% or more of the total amount. Readers should not let jewellery EPP options sway their decision when comparing credit cards in Dubai.
A cash advance refers to any cash withdrawal made with a credit card. Credit cards in Dubai typically carry a very large interest charge on cash advances. It is far more sensible to use a debit card to make cash withdrawals. Applicants should carefully consider the cash advance interest when comparing credit cards in Dubai, which is an entirely separate charge from retail interest.
Credit cards in Dubai can be equally rewarding or punishing depending on how and what they are used for. New applicants should carefully compare credit cards in Dubai to find one with the smallest fees and no hidden charges.