How to Manage Your Credit Card in Dubai |

How to Manage Your Credit Card in Dubai

Here's a closer look at how to manage your credit cards in Dubai as well as credit card limits, interest and what to use them for.

Posted on

10 January 2013

Last updated on 31 December 2017
How to Manage Your Credit Card in Dubai

To some people credit cards are a handy part of life and to others a route to debt that can cause major problems. Here we take a look at how credit cards in Dubai work and how to manage your card and your debt sensibly.

You will get offered many credit cards whilst in Dubai from your own bank and from others but will need to think carefully before applying or accepting one. A lot of people use credit cards wrongly and end up in major debt that they can’t handle.

Credit card limits

You are usually offered a credit card with a limit 2 times or 3 times your monthly salary which sounds great but think that you would have to work for 3 months without spending anything else to pay that card off. And on top of that, you will have to pay interest on the money as well. Do you really want your limit to be that high?

If you can, ask the bank to lower your credit card limit to something that is more realistic. If they cannot do this, then set a limit for yourself and stick to it.

Plan your exit strategy

Life is constantly changing. Whether you are planning to go back home or end up being made redundant, you will have to have some sort of exit strategy in place. Not paying your debt can cause major trouble for you that can ruin your future, inhibit your travel and even end in imprisonment.

Don’t spend too far over your limit and prioritise paying all your debt off first before spending unnecessarily. You can decide how much of the balance of the card you are going to pay off every month. The lowest is usually 5% up to 100%. We recommend paying as high a percentage as possible, this means you are lowering more off the balance of what you owe, rather than the majority of your monthly payment paying off the interest on your spending.

How to Manage Your Credit Card in Dubai

Manage your spending

Don’t plan to get a credit card to make a major purchase but rather look at a personal loan. A credit card is okay for borrowing small amount but becomes very expensive for large amounts. The interest is less on a personal loan and the payments are for a fixed term, more manageable and you won’t be tempted to just put that one more thing on your card.

Keep your limit low

Credit card companies are going to call you offering another credit card, or offering to increase your credit limit for you. Don’t be tempted to raise your spending limit during these calls because before you know it, you will have maxed out your credit card. Stick to your guns and keep sensible.

If you find you have gone too high on your credit card and it is with your bank, arrange a meeting with them to ask if you can convert the outstanding balance to a load in order to pay off the card quicker and with lesser interest payments to be made. If you do manage to arrange this, cut the card up and never use it again!

Handy tips if you have a credit card

  • Avoid the minimum payment trap. Rather pay as much as you can each month.
  • Don’t withdraw cash from your credit card – the bank charges on withdrawing cash are ridiculous.
  • Work out exactly how much interest you are paying on your credit card. It might help you think twice before making your next purchase.
  • Freeze, and we mean literally freeze your credit card in a cube of ice if you are an impulsive buyer and know there’s a sale coming up.
  • Leave your credit card at home. Not having it with you reduces the temptation of using it.
  • Always pay your credit card on time. You are penalised for late payments.
  • Avoid creating recurring payments on your credit card.
  • Double check your statements to make sure that all the transactions were correct as well as to see where your money is going.
  • Use the snowball effect to pay off your debt: start with the smallest amount and once it is finished used the money you are saving to pay off the next smallest amount. This way you are building momentum in paying off your debt as well as creating small victories for yourself.
  • Create a budget for yourself and stick to it. Include money to save for expensive items.
  • The most important thing is to try and live within your means and don’t be too tempted by offers of high credit limits. My grandmother always use to tell me: “If you can’t afford it you can’t have it!”