Choosing a credit card is quite stressful especially if one lives in UAE, as debts need to be paid sooner or later no matter how much freedom the credit limit offers. Choosing the perfect credit card for yourself is an art; you may end up choosing a card that charges a lot in service fees even though you don’t use the card that much or you may a card which offers no benefits even though you spend a lot on it.
There are over 200 different variations of credit cards in UAE and each one of these is tailored to a different lifestyle, spending habit and income bracket hence no one credit card is superior to others. You can apply for a credit card if you earn a minimum monthly salary of DH 5,000 however this piece of plastic can become either a great buddy or a debt trap for you if you aren’t careful enough. Mentioned below are some tips for choosing the perfect credit card for yourself while living in UAE so that you can get the most out of your card.
Top 10 Tips to Choose the Perfect Credit Card for Yourself in UAE:
Before subscribing to a credit card, you should decide whether you would want to pay your credit card bills to the bank on a monthly cycle or make payments after 30 days/over several months. The reason why you should decide this in advance is that if you clear the credit card bill each month before the due date, the interest rates on the credit cards will not affect you.
While choosing a credit card, you should also consider the more fun aspects of the credit cards which are the niche benefits provided or the extra incentives offered by various providers. Depending on your personal preferences, you can choose a credit card which gives you the incentive of either getting cash back on purchases, movie ticket deals, discount on school fees, air miles, dinner and lunch vouchers, and reward points which can be redeemed through shopping and/or dining and many more. Some platinum and gold credit cards also offer free airport lounge access, free or discounted health club memberships, golf privileges and/or free room or plane ticket upgrades. People who travel a lot would benefit from a card where traveling and spending points are piled up to give the user attractive offers on mileage, plane tickets, airport lounges, hotel stays etc.
You should be aware that no matter how much freedom a credit card offers, the debt on it still has to be paid so you should choose such a card which has a sensible credit limit so that you can pay it off within the granted time period. You can use SpotServe to compare different credit cards so that you can see for yourself which card can become your credit buddy and which can become your credit enemy.
When you are thinking of applying for a credit card, one thing that you should be certain about is your spending habit i.e. are you a big spender or a small spender? Are you a spendthrift or a cautious credit user? Do you use credit cards when dining or for entertainment purposes or just for grocery shopping? What is the biggest expense that makes a dent in your wallet? First, you need to ask yourself whether you actually need a card or you just want one for fashion purposes. If you need a card then browse through SpotServe to find the credit card that will reduce your expenditure on your highest spending place.
Another thing that you should be aware of is that Islamic banks are Sharia compliant and so they do not charge their clients profit over profit. What this means is that the card issuing bank will apply a kalafah fee on the cardholder as the membership fee for services the bank provides on the card and this fee is determined in advance and is fixed and is not linked to the amount spent by the cardholder. Late payment fee on these Islamic credit cards is fixed and is considered to be compensation or penalty for the late payment. It is calculated based on the outstanding balance and is most of the time given to charity.
Secondly, these Sharia-compliant credit cards also offer balance transfer plans at low rates. The benefits of these cards include 0.5 to 1 percent cash back on every dirham spent which the customer can use to pay utility bills such as FEWA, DEWA, DU, Etisalat, and Salik. Not only this but other personalized services such as roadside assistance, purchase protection and/or travel insurance are also offered on some cards. Other factors to consider when looking for a card are the annual fees which are mandatory for some credit cards, amount of cash withdrawal charges and other service fees- remember to ask the salesperson for any hidden fees.
Most banks offer a supplementary credit card to the credit card holder or one or two of his immediate family members as an incentive, however, you can choose not to take them. If you want a second card then remember your motivations as well as your ability to pay while getting one. Ask the salesperson to check your debt-to-burden ratio, to see if you are eligible.
If you are planning to use a credit card for overseas transactions than bear in mind that some banks charge 2 to 3 percent of your overseas expense amount as the processing fee for each time the credit card is used by the customer.
A credit shield is like an insurance against your credit card bill- it removes a negligible amount from your credit card bill for unforeseen circumstances such as death, disability and/or injury which stop you from repaying your credit in the future. However, if you do not use your credit card for such huge expenses then it isn’t important for you to activate the shield.
Most banks in UAE, as well as the rest of the world, offer interest-free instalment plans when it comes to purchasing goods and services. The duration of these plans can be anywhere from three months to 36 months. For instance, when you buy a phone and choose the instalment option then many banks offer you an interest-free payment plan for 3 months, 6 months, 9 months and/or 12 months if you use their credit card to initiate the payment. Some credit cards also offer parents the chance to pay their child’s school fee as part of an easy instalment plan.
Always look at the fine print or the hidden terms and conditions on the contract before ticking on the ‘agree’ tab. The fine print might contain details on fees charged for using the credit card during a year, additional costs charged when the card is used during a promotion, stipulations (if any) on spending, stores included/not included in the offer and etc.
And finally, choose the channel where you will compare and apply for a credit card. Take advantage of cash back rewards incentives with these bank partners, such as SpotServe. Search for the right credit card for you- download SpotServe on Google Play or Apple Store or go to https://www.spotserve.ae/dl for an exclusive invite to download the SpotServe Beta Version. SpotServe works by providing a detailed credit card comparison so that its customers can get the best visa credit card in the banking system as per their requirements.