Introduction to Credit Cards
Credit cards are most commonly used and they are consumer friendly. Credit cards are a type of a debt instrument that comes with a pre-determined credit limit. Credit cards free the user from carrying real currency and it is convenient and safe to use online as well as offline.
The possibilities are nearly endless when it comes to credit cards. They can even be your gateway to emergency cash when you are running short or provide you with exclusive discounts and privileges when you travel. For those who are particular about their banking preferences, there are also credit cards that comply with the Sharia laws of Islamic banking which means that they are free of interest.
If you have a credit card, you are taking an unsecured loan from the bank and this has to be repaid in full if you do not wish to get charged any interest. It’s always wise to know how credit cards work.
Features and benefits of credit cards
Following are the features and benefits of credit cards offered in the UAE:
- It is an alternative to cash. You can make purchases using your credit card and this reduces the need for you to carry large amounts of cash. The payments can be made quickly and it reduces the risk of theft.
- You get a credit limit on the card which determines the amount up to which you can spend on the card. This differs from person to person and varies between banks as well.
- Most credit cards can be used all over the world. It helps in easy payment as you need not convert your currency.
- Nominal fees are charged on your credit cards which have to be paid on a yearly basis. There will also be other charges such as joining fee, service fee, etc.
- You can earn bonus points, rewards points, air miles, cashback, etc. when you make purchases using your credit card. The points can be redeemed for cash or other benefits.
- You get grace period to clear the bill amount each month. During the grace period you will not be charged any interest.
- It helps you with building a good credit history. It helps you keep track of your financials. A good credit history helps you when you are taking a home loan, car loan, etc.
- Credit cards offer good assistance when you are low on cash and it helps you cover your expenses in times of emergencies.
- There is a greater level of security offered when you are using it to make purchases online as well as offline.
- You get exposed to additional benefits such as discounts at restaurants, hotels, on air tickets, etc.
Types of credit cards available in the UAE
Not every credit card offered in the UAE is the same. They vary with the services that they have to offer and the rewards that they offer. Some of the most common types of credit cards are:
- Islamic Credit Cards: These are compliant with the Sharia laws of Islamic banking and charge no interest.
- Travel Credit Cards: These are credit cards that provide you with benefits like access to exclusive, premium airport lounges, or extra air miles when you use this card to book flights.
- Insurance Credit Cards: This card comes with insurance benefits like Takaful insurance, personal accident cover or travel insurance.
- Fuel Credit Cards: Fuel credit cards get you special discounts and offers when you use them to fill fuel in your vehicle.
- Groceries Credit Cards: These cards give you access to special offers when they are used at certain retail stores.
- Shopping Credit Cards: Shopping credit cards offers with special offers such as discounts and cashback when they are used at select stores and outlets.
- Cashback Credit Cards: A certain percentage of your spending is converted into cash and returned to your credit card account.
- Dining Credit Cards: These cards provide customers with attractive discounts and offers at participating restaurants.
- Entertainment Credit Cards: You get discounts and offers on movie tickets, bookings made at water parks, etc.
- Rewards Credit Cards: You get bonus reward points for taking the card, you can earn higher reward points on purchases for every AED spent on the card.
- Premium Credit Cards: These credit cards give customers a feeling of exclusivity. They usually combine the benefits that you get with your travel or shopping credit cards.
- Student Credit Cards: Students are offered with low annual fee and low interest rates on retail purchases. Most banks offer these cards without any annual fee.
- Business Credit Cards: These are cards that are meant for businesses and are issued to employees who need to make purchases on behalf of the organisation.
- Lifestyle Credit Cards: These credit cards offer access to discounts and offers from places like spas and gyms.
- Utilities Credit Cards: These credit cards allow cardholders access to special offers and rewards when they use it to pay for the utilities.
- Golf Credit Cards: These cards provide access to premier golf courses. You get discounts on membership fee or privileges like playing at certain clubs for free.
- Prepaid Cards: These cards are not exactly credit cards but can be used as debit cards where in you deposit cash in this cards and use it whenever you want.
- Co-Branded Credit Cards: These cards are mainly bank credit cards associated with popular brands like stores, airlines, e-commerce, hotels and more.
- Loyalty Credit Cards: These credit cards offer loyalty rewards whenever you spend a dirham at stores you visit frequently.
- Balance Transfer Credit Cards: These cards by banks helps you in transferring the credit card balance from one bank to other at low interest rates.
- SME Credit Cards: These credit cards are especially available for small and medium enterprises in UAE. It’s mainly a business credit card which can be used for business related purchases with high credit limit.
Credit card profit rates and annual fees in the UAE
The profit rates for retail transactions in the UAE falls between 1.99% per month to 3.09% per month. The annual fees required for the various credit cards offered in the UAE are as follows:
|Credit card||Annual fees|
|ADCB||AED0 – AED2500|
|ADIB||AED0 – AED500|
|CBI||AED0 – AED150|
|Citibank||AED150 – AED600|
|Emirates - Citibank||AED250 – AED300|
|PremierMiles||AED400 – AED1,500|
|DIB||AED0 – AED1,000|
|EIB||AED0 – AED950|
|Emirates NBD||AED0 – AED1,500|
|First Gulf Bank||AED50 – AED550|
|Mashreq||AED0 – AED1,500|
|NBF||AED250 – AED500|
|NBQ||AED0 – AED2,000|
|United Arab bank||AED0 – AED1,500|
|Standard Chartered||AED300 – AED750|
|NAJM||AED0 – AED499|
Note: The annual fees vary from person to person based on the credit score and the income.
Credit card eligibility
Most banks in the UAE require the applicant to have a regular monthly income to apply for a card. The specific income requirements will be different from bank to bank depending on the type of card.
The applicant must be at least 21 years of age to be eligible to apply for a credit card.
Credit Cards based on your salary
If your salary is AED12,000 and above there are cards especially for you which offers various benefits.
If your salary is AED5,000 or less, still you can avail a host of credit cards offered by banks in UAE.
Apart from above salary there are many more such cards offered by banks in UAE based on your income and companies you work for to opt for.
How to apply for credit card in the UAE?
There are many types of credit cards offered in the UAE and all you need to do is find the best one that fits your needs. If you decide to get a credit card, you must figure out the rewards system that you want and choose it based on your spending pattern.
|Checkout: How to find the perfect Credit Card in UAE|
Popular credit card fees charged in the UAE
Following are the common fees charged to most credit cards:
- Annual fee for principal card and supplementary credit card.
- Retail interest rate is interest charged on the retail purchases made using the credit card.
- Cash advance interest rate is the interest charged oh the cash you withdraw from your credit card.
- Cash advance fee is the fee that is charged for the cash advance transaction.
- You will have to pay the international transaction charges if you use the card overseas. Most cards let you conduct transaction in foreign currencies for a cost.
- Late payment fee will be charged if you do not pay the bill in time. This amount is to be paid in addition to the amount due.
- Over limit fee is charged when you stray over the set credit limit.
- Credit shield is offered to most credit card holders in the UAE. This helps you to pay back the outstanding balance if you are unable to clear it out due to disability, death, etc.
- Card replacement fee is charged if you apply for a credit card replacement.
What should you do if your credit card is lost, stolen or damaged?
If your credit card is lost, stolen, or damaged, you must immediately notify the bank. You can reach the bank at the customer care service number. To know more on what you must do when your credit card is lost, stolen, or damaged, read here.
Common mistakes to avoid when it comes to your credit card
Credit cards are very convenient and easy to use. But, you must not forget that it is not a debit card and that you are taking a debt from the bank and this amount has to be repaid on time. Most often people use it recklessly and end up in huge debt. So know more about the common mistakes that you must avoid.
If used correctly, credit cards can save you money. Read more here to know more about how you can save money with a credit card.
If you have any unused credit cards, you must cancel them. You may think that you may need it in the future, but it’s always best to cancel your unused credit card.
While there are many banks in the UAE that offer credit cards to customers
NBAD stands for National Bank of Abu Dhabi and was established in 1968. Credit cards are just one of the many products it offers its customers and been considered a trusted bank for a long time. It is also considered one of the largest banks of the UAE.
If assets alone were to be a yardstick then Emirates NBD would be considered one of the largest banks in the Middle East. It is a relatively young bank, having been set up in 2007 and offers its customers a host of banking services including credit cards.
Abu Dhabi Commercial Bank was established in 1985 and has the government of Abu Dhabi as one of its principal stakeholders. It was formed through the merger of three other banks and offers customers a host of services than range from banking accounts to loans to credit cards.
RAK Bank or National Bank of Ras Al-Khaimah was established in the 1970’s and is hailed as one of the most successful banks of the UAE. It even offers Islamic banking services to its customers.
The First Gulf Bank was established in 1979 and has its headquarters in the emirates of Abu Dhabi. It offers many banking services to its customers, including Islamic banking and credit cards.
This is a bank that has been around since 1967 and has branches spread across the world. The bank has won many awards for the services it provides and offers customers products that range from personal banking to credit cards and more.
The Abu Dhabi Islamic Bank is a bank that provides banking services based on the principles of Islamic banking. It is completely compliant with the Sharia law and has been engaged in providing the best services possible which include banking accounts, loans and credit cards.
While both Credit and Debit cards come in the form of a standard plastic card the similarities between the two for the most part end at the physical attributes. Almost everyone is familiar with Credit cards and Debit cards and although they work towards carrying out transactions and act as an alternative to cash, they differ in ideology, payment structure, and benefits offered.
- Difference in Working:
- Difference in Benefits:
- Difference in Payments:
Debit cards are linked to the account of the holder and moreover directly linked to the amount of money in the account. That is to say a debit card can be used to carry out transactions as long as there is enough money in the account to pay for those transactions. A credit card on the other hand is a credit linked facility which means it does not require the presence of money in a particular account. It offers the holder a pre-determined limit of credit that allows them to carry out transactions immediately but pay for them later with interest.
The debit card allows for the cardholder to withdraw money at ATMs for a minimal processing cost but doesn’t offer too many rewards apart from the occasional discount or cashback offer. A credit card mainly offers benefits such as travel perks, insurance policies, reward points for every expense charged to the card and so on. The facility of cash withdrawal is also present on the credit card but comes at high processing fees and a hefty interest charged on the money withdrawn.
The debit card is linked to the current or savings account of the holder and hence can be used to the limit of how much money is present but credit cards allow the holder to purchase on credit which means they will have to pay the outstanding balance with interest at a particular allotted date of every month known as due date. These billing cycles involve a minimum payment amount and also charge a penalty for failure to pay within due date.
There are certain do’s and don’t’s that could either land you in trouble with your credit cards or make your credit card your best friend. Therefore, the things you need to be careful about are:
|Safety first: Make sure you are not careless about your credit card details and if you suspect misuse of your card, make sure you report it to the bank immediately.||Maxing out cards: The first and most obvious is to try your best not to reach the limit of your credit cards. This will just put pressure on your income when it comes time to pay it back.|
|Take advantage of it: If your credit card offers you discounts or special features, make sure you utilise them.||Too many cards: Take only as many cards as you are sure to be able to pay back. Paying back small amounts on too many cards could have the same effect as maxing one out; taxing your income.|
|Pay up:Make sure all your credit cards are all paid up. Even if you feel that you can’t pay back the card in its entirety, make sure to make the minimum payment at least.||Delayed payments: Don’t let your payments go in after the last date. This just tells the bank that you may not be responsible with your payments and paints a negative image of you. It also attracts late payment fee.|
|Grace periods: Some cards offer interest free periods so make sure you payback within that period to avoid extra charges.||Sharing: In the interest of safety, don’t share your card details with anyone and ensure that your cards are kept secure at all times.|
There are some important things that you must always keep in mind before you take any credit card. Some of them are:
- Make sure that the card you take suits your lifestyle. This means that if you are into shopping then take one that gives you shopping benefits. If you travel a lot then take one that will give you travel benefits.
- The single most important consideration before taking is a credit card should be your ability to pay it back. If you take a card you can’t afford then your debt will only mount and put strain on your personal finance.
- Most of the cards offer a credit shield that kicks in to cover your outstanding balance should something disastrous happen to you. This means that your credit cards will never be a burden for your family.
- Checking the interest rates is also very important because many a times it may happen that you may stumble across a similar card that offers the same features but a lower interest rate compared to the one your had already selected. This will, in turn, mean that you will be able to paybacks without stressing your finances.
The biggest advantage you will have with BankBazaar is that you can browse and find the credit card that suits you the most, within minutes. There is never a dearth of information with us and you always have all the information you need to make an informed decision. Best of all, exploring credit cards on BankBazaar is almost akin to shopping since you are almost always spoilt for choice in the products on offer.
Q. How many cards can I take?
A. There is no limit on the number of cards you can take however, it is advisable only to take as many cards as you can pay back.
Q. What is the interest that I have to pay for these credit cards?
A. The interest rate for each credit card is determined by the bank based on its purpose and type.
Q. What is the minimum monthly payment?
A. While the minimum monthly payment is subject to the bank's policy, most banks maintain that you can pay back a minimum of 5% of the outstanding balance.
Q. What happens if I pass away and have an outstanding balance?
A. If you are worried about your outstanding balance becoming a burden in your absence then you can go in for the credit shield which covers the balance for the payment of a fee.
Q. Can expatriates take these credit cards?
A. Yes, as long as they meet the eligibility criteria for the card and have all the valid documents required, they too can take these credit cards.
Q. Are there any salary requirements?
A. Yes, many of the banks maintain that you need of have a specific monthly income in order to apply for a card. This requirement changes from one bank to another and from type of card to another.
Q. Can I take ANY credit card?
A. No. You have to meet the eligibility criteria for each card to be able to take it and some premium cards are also issue if and only if the bank invites you to take that card.
Q. Can I retain my credit card if I permanently move away from the UAE?
A. You will be required to clear your outstanding balance and surrender your card before moving abroad.
Q. What documents do I require to apply for a credit card in the UAE?
A. While the issuing bank intimates the applicant regarding the documents required, most banks in the UAE require the following set of documents at the very least:
Original and valid copy of passport
Original and copy of valid Emirates ID
Bank account statement (last 3 months)
Salary certificate from current employer (not more than 30 days old)
- Credit Card Frauds in UAE
- Visa vs Mastercard - The Difference
- Credit Card Security
- What is Credit Shield?
- Get Cash Advance from Credit Card
- Common mistakes to avoid when it comes to Credit Cards
- Finance charges calculation on Credit Cards
- Payment options to settle Credit Card debt
- Guide to Secure Online Shopping
- How Credit Cards Work?
- Credit card debt defaults & its consequences
- Credit card purchase protection
- Credit Card Glossary
- Paying off your credit card debt - Things to ask your Bank
- Credit cards can save you money
- Credit cards for salary above AED12,000
- Credit Cards with salary of AED5,000 or less
- Cashback or Rewards Credit Card
- Closing your unused credit card
- Which type of Credit Card user are you?
- International Credit Card Fees
- Types of Credit Cards in the UAE
- Best Islamic Credit Cards UAE
Relevant Blog Posts on Credit Card
How to Get the Best Deal on Credit Card in the UAE?
Are you planning to apply for a credit card in the UAE? How do decide your credit card given that a huge number of credit cards available in the UAE financial market. Mostly, what we do is we respond to the emails sent to us by credit card providers or phone calls made by credit card representatives, and pick up a credit card randomly. Read More…
News About Credit Card
Visa card transaction growing at a slower rate in the UAE
The Visa card payment company said that the transactions are growing at a slower rate in the UAE last year. 10% growth rate was recorded for 2016 and it was half of the 20% recorded in 2015. There has been a 5% jump in transactions after its tie-up with Dubai Shopping Festival. The visitor spending for 2015 Dubai Shopping Festival was 8%. The main competitor of Visa is cash and the company is strategizing to shift its customers to electronic commerce. UAE is encouraging the use of electronic commerce. The taxis in Dubai are accepting card payments and there has been a growth of Uber and Careem fuelled electronic payments. There has been an 11% growth in online sales transactions. A large number of UAE residents tool to online channels and e-commerce for retail. A good number of people trust in the electronic payment option while most prefer to use cash. 20% of Visa’s sales are through credit cards and the numbers doubled during Dubai Shopping Festival and White Friday. There are partnership incentives that encourage customers to pay online.
18th January 2017
Credit card applications in the UAE are up by over half
There has been a 54.75% increase in credit card application in 2016 than they were in 2015. Most of the applications were for non-Islamic credit cards. The applications for non-Islamic credit cards have increased by 134.23%. Islamic credit card applications saw a decrease in number by 8.57% fewer people applying. The credit card applications increase was made by people earning AED20,000 – AED29,999. This proves that most of the bank’s targeting strategies for 2016 paid off. The applicants applying for credit card falling under the salary bracket of AED5,000 to AED9,999 saw an increase by 58.77%. Application for cashback credit cards doubled during 2016.
16th January 2017
Spend at Abu Dhabi Duty Free and Earn Cash Back with Finance House
Finance House, the financial institution based out of Abu Dhabi, declared a 10% cash back offer for all their credit card holders spending at the Abu Dhabi Duty Free.
The Finance House Head of Retail Finance, Hasnain Yousuf Khoja, stated that this move was in keeping with their customers’ needs in the holiday season. This offer would help their customers enjoy the joy and excitement of visiting their homes without worrying about any eleventh-hour shopping requirements. The cash back opportunity would help travellers make purchases from the Duty Free shops without any major financial setbacks.
Finance House already has a wide variety of value added services and payment plans in addition to the cash back offers they roll out all through the year. This new offer affirms the Finance House’s dedication to cater to their customers’ evolving needs.
22nd December 2016
Mashreq collaborates with Novo Cinemas to give rewards
Mashreq and Novo have entered into a partnership here in the UAE. Mashreq cardholders will gain a discount of 50% on IMAX, 3D, 2D, and 7-Star movie tickets when they make reservations at Novo Cinemas or on the Novo Cinemas website or on the Novo Cinemas app.
Mashreq has made this new deal with Novo Cinemas to enable cardholders to enjoy watching movies at the cinema thoroughly. Apart from this discount, Mashreq cardholders can soon use TAP n GO. This feature is the first Near-field Communication (NFC) sticker solution in the UAE. This feature will allow you to make instant payments without swiping or signing. You also do not have to wait in the queues in the ticket counter or the snack counter.
15th December 2016
Credit card loyalty program launched by Al Masraf Bank
You can earn Al Masraf Points in three ways, first is through sign-up bonus, second is by transaction for every $1, and third is through Bonus Annual Spend for the total retail purchases. The accumulated points can be redeemed for instant rewards. Some rewards include free airline tickets, hotel stays, car rentals, electronics, and tickets to sporting events. The main focus is to build up relationship with the customers and to boost the business.
30th November 2016
Most UAE residents turning to credit for festivities
With the UAE National Day, Christmas and New Year looming around the corner, the next 6 – 7 weeks are going to be costly for most people in the UAE. According to the Travelex survey conducted last year, it was found that Dubai spent an average of AED1,635 on New Year’s Eve. Since there will be a lot of school outings, night outs, and parties in the coming days, the UAE residents plan on covering the cost using credit cards. under 43% chose to pay in cash, 39% said they will use credit cards and the rest will use their savings or take a loan. Most people prefer to use the credit cards to buy high-ticket items to avail cashback, rewards, air miles, etc.
24th November 2016
Emirates NBD asks customers to borrow more sensibly
UAE’s largest lender, Emirates NBD has taken a socially responsible way to grant loans and are encouraging the customers to determine if they really need the money. The bank believes that it is their responsibility to educate the customers to borrow wisely. Even if the customer wants to borrow a larger amount of personal loan, they are encouraged to only borrow what they require without over-leveraging themselves. Emirates NBD offers loan based on various criteria such as salary, employer profile, length of service, credit rating, overall debt burden, etc.
03rd November 2016
Credit cards that included extra air miles
ADCB has included up to 75,000 bonus Etihad guest miles. You can sign up for Infinite. ADCB Etihad Guest Above Credit Card and receive 50,000 bonus miles. Additional 25,000 miles are offered on spends of US$10,000 within 90 days of the card being set up. Salary transfer account will receive another 25,000 air miles.
Expiry: 31st October, 2016.
Annual fee: Dh2,500.
• Emirates NBD:
On signing up for Emirates NBD Infinite Skywards Credit Card, you will earn 25,000 bonus miles. On spending $25,000 you get 25,000 bonus miles. On spending $3,750 with Emirates you will receive further 25,000 miles. You get access to 500 airport lounges and 5 free nights at Marriott.
Annual fee: Dh1,500.
On signing up for Emirates-Citibank Ultima Credit Card, you will receive 25,000 instant air miles. On payment of annual membership fee, cardholders will receive 10,000 Skywards miles. Cardholder also gets access to over 650 airport lounges, dining privileges, complimentary golf sessions, and travel insurance.
Annual fee: Dh3,000.
Beware of financial crime this Eid season
Falling victim to a financial fraud is something everyone fears when you are planning to travel during Eid. Close to 8% have been victim of credit card fraud abroad and it is therefore important that you keep your credit cards in clear sight. Secure your phones so that when you are using a public internet network, your information will not be stolen. If you need to connect to an insecure Wifi when you are abroad, make sure that you follow certain safe methods and absolutely stay away from making payments online when connected on an unsecured Wifi.
08th September 2016
UAE millennials drive e-commerce surge
E-commerce spending has increased by 25% in 2015 in the GCC because of high spending UAE millennials. 1000 millennials and non-millennials were interviewed in the UAE and Saudi Arabia in the study. The millennials will continue to drive the trend for increased card usage. VISA predicts that the credit cards will account to 65% if non-cash retail payment volumes by UAE residents and in Saudi Arabia, the debit cards will account for over 70%. The study sassy that the banks, issuers and merchants should adopt a consumer centric business to adapt to the changing preferences of the millennials.
01st September 2016