Credit cards aren't just important for your overall financial health, but for your safety and lifestyle, too. Here's what makes that plastic fantastic!
2 November 2020| Last updated on 22 February 2021
Most cardholders in Dubai have the idea that credit cards are only for shopping, with the occasional rewards...
But the truth is that most consumers are not aware of the other benefits and can miss out on thousands of dirhams worth of perks and privileges they can access.
You probably already know about the quick and easy use of credit cards, but that little plastic in your pocket is capable of so much more.
With so many credit cards available in the market, the benefits can vary by card type, even if they're from the same issuer. Remember to check the terms and conditions, exclusions, and limitations that may apply to you.
The best way to take advantage of their benefits is to understand the card that you have, what it offers, and what you need.
If you're unsure, dig up and have a go-through on that agreement you signed when you received your card; or, flip the back of your card and call the 24-hour toll-free customer hotline for easy information.
Beyond its convenience as a handy fund-injection, there are other benefits that credit cards in the UAE offer. Read on to learn more about the benefits credit cards offer and how to take advantage of them.
1. Reward Benefits
Every time you swipe your card in-store or use it to pay online, your bank ears an "interchange fee" from the retail outlet or merchant you spent from.
Banks offer a small reward, or "points", as an incentive to encourage you to spend more or for your patronage. These can come as cashback, points, vouchers or travel miles that can you earn and redeem for a variety of perks.
Cash rewards can help reduce your card balance, travel rewards can result in seat upgrades or free plane tickets, and vouchers can be traded in for gifts.
However, some rewards have an expiry date, point caps and minimum spends you will need to watch out for.
Credit cards are built to protect the shopper - a.k.a you. Whether you're spending in-store, online or while travelling, and a company doesn't make good on what you paid for and won't give a refund, your credit card can help you.
Some credit cards also provide additional protection with extended return (exchange) policies, extended warranty, and price protection.
For example, with "purchase protection", you can reimburse items you've paid for on credit that are damaged, lost, need repairs, or stolen.
They are the most secure way to spend, safeguarding you against online fraud and unauthorized transactions.
3. Travel benefits
Back in the 1950s, the original use of credit cards was for customers on the go who needed a convenient alternative to cash.
If you are a frequent flyer or have vacation plans in mind, you may want to consider a travel credit card that will reward you with seat upgrades, discounted or even free plane tickets, VIP lounge access (even if you're on an economy class ticket), travel insurance, lost luggage protection, car rental insurance, trip cancellation insurance, and much, much more!
Plus, credit cards are readily accepted around the world, making that card a must-have anytime and anywhere you travel.
Another big benefit of using credit cards is that if you pay your dues on time, you can get a 30-days interest-free loan.
If you have unused credit on your card, it is technically excess cash in your bank account. You can avail "flexible installment loans" and choose a payment plan that works for your financial status.
You can also take a "cash loan on card" and maximize your credit limit in case of emergencies when cash is really necessary.
If you want to convert a purchase into installments to repay over time, you can check with your bank to see if they offer interest-free installment plans with partnered retailers and malls so you can plan your shopping accordingly. This is a handy feature if you're looking to upgrade your phone or pay your child's tuition.
5. Safety benefits
Credit cards come with fraud protection that safeguards you from theft and any problematic transactions down the road. Most credit cards have instant alerting services by SMS, email, and at times, even a phone call to help you keep a tab on transactions.
Unlike spending with cash, credit cards offer 3D Secure, embedded chip, and PIN, making it the safest way to pay online or in-store. If you lose your card or it gets stolen, they offer zero liability so you are covered if the card is misused.
Other cards offer "Credit Shield" that provides protection against unforeseen circumstances such as critical illness, job loss, injury, and death. This option pays the outstanding balance, acting like a small insurance for your credit card bill.