Credit cards are a way of life for many people here in the UAE, and can either prove to be very handy for the wise spender or debt trap for those who are not careful with their spending. The lure of a credit card, particularly here in the UAE, is very high as many expats who move here are tempted by the flashy lifestyle and its accompanying trappings.
Fancy cars, expensive clothes, and eating out can exact a heavy toll on your wallet, but unfortunately are so common that many expats opt for the credit card route in order to live the lavish lifestyle, little realizing that everything spent will ultimately need to be paid back.
Most banks and other financial institutions offer credit cards with spending limits that are two or three times that of your monthly salary, which is very attractive to many people. However, this means that to pay back the credit card dues, you would need to work for two or three months without spending any money on anything else.
Instead, opt for a sensible limit on your card so that expenses are manageable and can be paid off in a month’s time if required. Remember that all debts and loans in the country have to be paid off before you can relocate elsewhere, so being able to pay off your credit card bills in the future is extremely important.
What to look for in a credit card
Having said this, credit cards (if used sensibly) can be very effective in managing finances, earning rewards on everyday expenses, and maintaining your cash flow. There are several criteria that should be considered before opting for a particular credit card:
- Interest rates: These should be carefully considered and may vary based on month salary and place of employment.
- Salary requirements: Most credit cards have a minimum salary requirement, so make sure that you are eligible for a particular card.
- Foreign currency rate: If you are a frequent traveler, consider how much extra you will be paying for transactions conducted in a foreign currency. Most credit cards will charge a fee that is a percentage of money spent for overseas transactions.
- Annual fee: Read the fine print. Many cards advertise “No Annual Fee” for the first year, but these do apply from the second year onwards.
- Other fees and charges: Look for these hidden fees such as late payment fees.
- Benefits offered: Consider the benefits offered such as air miles, access to airport lounges, cash back, and discounts in partner companies.
Top seven credit cards in UAE
- Majid Al Futtaim (Najm) Blue Visa card: A great card for everyday spending, the Najm blue card is applicable for those with a minimum salary of AED 5000 per month and offers 2% cash back on all purchases from the hypermarket Carrefour, and 1% cash back on purchases from all other locations.It has host of other facilities as well, including buy-one-get-one-free offers on movie tickets at any VOX cinema in the UAE. The card has no annual fee and can be used overseas, but foreign exchange fees are applicable when the card is used overseas.
- ADIB Etihad Guest Visa Platinum Card: The ADIB Etihad card is perfect for frequent travelers and offers card holders 2.5 Etihad miles on every 4 AED spent on the card. These miles can be redeemed for Etihad airline tickets, or can be used to upgrade on Etihad airlines.A minimum salary of AED 5000 is a requirement for eligibility, and the card does have an annual fee of AED 2000. The card offers a host of other privileges including airport lounge access, 4 free valet complimentary parking visits per month at most Dubai and Abu Dhabi malls, and roadside assistance.
- NBAD Gems Titanium Credit Card: NBAD has tied up with the GEMS Education Group to bring you the Titanium card, which offers up to a maximum of 7% discount on annual school fees paid in advance at any of the GEMS schools in the UAE.The card also offers 1.5 NBAD stars for every 1 AED spent. These stars can then be redeemed for a range of travel and lifestyle treats. The card is on offer only to those who have a child enrolled in one of the GEMS schools.
There are no annual fees, but a late fee of AED 250 does apply for every month in which a payment is made late, or the amount paid is less than the minimum. The card can be used overseas, but overseas transaction fees will apply.
- Mashreq Platinum Elite Card: For those with a minimum monthly salary of AED 7000, the Elite card offers a variety of benefits on golf, dining, shopping, entertainment, and travel.Card holders can get 4 Salaam points for every dirham spent within the UAE, and 10 Salaam points for every dirham spent overseas. The card also offers privileged access and discounted fees for access to the Al Badia Golf Club in Dubai and the Abu Dhabi City Golf Club.
- RAK Bank Titanium Credit Card: The Titanium credit card offers members a host of benefits including free purchase protection, free travel accident insurance, up to 3% cash back on all domestic purchases, and 5% cash back on all international purchases. The card is free for life with no annual fees and exclusive offers on dining, jewelry, and holidays.
- Standard Chartered Bank Titanium Credit Card: The SC Titanium card offers unmatched benefits with up to 10% cash back on amounts of AED 10,000 or over spent on school fees, as well as cash back on a host of other payments made with the card. The card can be applied for by those who earn AED 12,000 or more.
- Emirates NBD Titanium Card: The ENBD Titanium Card offers its members a world of travel and lifestyle perks including airport lounge access, health club benefits, and golf privileges. The Emirates NBD Plus Points program is one of the best programs in the region with 1 Plus Point offered for every AED 100 spent on the card. Plus Points can be redeemed for vouchers, flyer miles, and a host of other retail merchandise.