UAE Credit Cards – What you need to know before you sign up!

UAE Credit Cards - Beware

UAE Credit Card

Many people have been experiencing a hard time when trying to get a UAE Credit Card. This is because they do not know the procedures that they need to follow whenever they are making their applications. Here is a guideline that you need to know on how to get a UAE credit card, and more importantly how to avoid paying huge interest rates and securing your card with a post dated cheque that could land you in jail.

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First, you need to approach a financial institution of your choice where you would wish to make your application. How do you choose the best financial institution? First, you should always do your research in the market to determine some of the best companies that you can use when applying for your credit cards in UAE.

Alternatively, you can also seek the services of financial analysts in the market. With their experience, you will always get the best advice when making a choice of the credit card instrument that you will sign up for. This will definitely help you make an informed choice when selecting the best credit cards as the interest rates and terms of the credit card agreements on offer differ widely between different UAE banking institutions.

Do you really need a UAE credit card?

This has to be the first question you should ask of course.  UAE credit cards generally are linked to the interest rates and the financial terms set by the UAE central bank that limit interest rates that can be charged.  Normally to secure a credit card in the UAE you will be required to write a post dated cheque ( PDC ) to cover the amount of your credit limit, think about this very carefully and read our section on post dated cheques before you apply.  It is always preferential to apply for a UAE credit card that is linked to your account balance, this is actually a debit card with a VISA or Mastercard payment option.  Taking this option means you are not being extended credit that comes with both risks and high interest rates in the UAE.

If you are hell bent on securing a credit card then you need to do your market research and once you choose a financial institution where you would wish to get your credit card from, you must begin the process of making your application.

In your application, you have a choice of either applying online or visiting the chosen financial institution at their branches in the country. However,  to save time and to avoid hours waiting in a UAE bank we suggest you apply online . This will definitely enable you to make the best application within the shortest time possible and to apply quickly to the relevant financial institutions.

Is it cheaper to get a credit card at home?

Some of the higher end bank accounts such as HSBC premier and some of the others will offer you a credit card facility with your account without requiring you to deposit a cheuqe for the balance amount, however it is almost certainly going to be better for you to apply for a credit card in your home country unless your home country has exorbitantly high interest rates.

I used my UK issued HSBC credit card in the GCC for many years, i never had to worry about defaulting and ending up in jail and I paid an interest rate of 16% on my credit card purchases compared to the interest rate of 24% that was available in the UAE at the time. If you tell your financial instiution at home that you are about to become an expat and reside in the Tax free UAE then you will find that in most circumstances the bank has specialized packages for expatriate banking, which of course will also include a credit card option.

Applying and getting your UAE Credit Card

If you can not secure your credit card at home and depending on the type of company that you have chosen, you will pay them the stated amount of money that they want, normally by writing a PDC (Post dated cheque) for the credit facility offered.

Most of the credit cards often take 5-8 business days to process, once your card is ready, you will receive a confirmation email that informs you that your card has been processed. In addition, your account should also be ready once your card has been processed to enable you start using the card.

Using shipping, the card often takes 3-5 days depending on the country of your origin. The cards has enabled people to buy easily at the same time saving you from carrying cash, or to use for business expenses.  In order to avoid high compound interest rates ensure you pay your credit card off every month, if you roll over your balance or do not pay your monthly balance for any reason you will normally end up paying interest on the interest that you have accrued, this makes credit card borrowing incredibly expensive.

Once you get the card, you will start to enjoy many benefits and these includes an improved shopping experience as many of the UAE credit card companies will offer rewards points on a card that can be used for travel, hotels or products from a number of retail establishments.  Keep in mind far from being free these points have been paid for by you and the interest rates that you pay on the card.

In summary be very wary of UAE credit cards, if you can find an unsecured card use this one, do not write a post dated cheque for your credit card balance that you can not afford to pay back and ensure that you have looked into cheaper options in your home country and considered if a VISA or Mastercard Debit card will be a better option for you.

About John Robberts
John Robberts is a journalist with 12 years experience of living and working in the United Arab Emirates.