• SME Credit Cards

    Most people are aware of personal credit cards and how they function. SME owners can now get a business credit card which has is slightly different from the personal credit cards. SME credit cards are designed to help businesses manage their company affairs in a better way. The SME credit card can be used for making business transactions and to pay for goods and for services rendered.

    The SME credit card also acts as an alternative to cash and cheques. Cash flow can be eased in the day-to-day transactions.

    Eligibility requirements to avail SME credit cards

    Following are the eligibility requirements to avail SME credit cards:

    • The providers will require a minimum period of operation. Most providers ask for 3 years.
    • The providers demand for certain profitability and revenue criteria.
    • Documents proving earnings are required.
    • The emirate that the business operates in is also one of the relevant eligibility requirements.
    • Some providers will require you to have a current account with them to qualify for a SME credit card.
    • The application will be assessed by specialist credit analyst.
    • Approval process is longer than personal credit card due to the complexity to prove the company’s eligibility.

    Features of SME credit card

    Following are the features of SME credit cards:

    • The credit cards spending limit is linked to the company’s cash flow.
    • SME credit cards are available as rewards cards, low rate cards, corporate cards and interest free days cards.
    • Most SME credit cards are shariah compliant.
    • You will get cashback rewards and travel rewards.
    • The card will be recognised worldwide.
    • Cash flow is improved and the accounting is simplified.
    • You also get insurance coverage.
    • Business purchases can be converted to easy instalment plans.
    • Current balances on other credit cards can be transferred.
    • You can take a loan against your credit card limit.

    Benefits of SME credit cards

    The benefits of SME credit cards are as follows:

    • You can keep the personal and business separately. This simplifies the administration and provides easy monitoring. You will be able to measure the business outgoings as well.
    • SME credit cards will have a higher credit limit. Designated employees of the company can receive individual credit limits as well.
    • Additional cards are offered for key employees to ease the payment process for the day-to-day transactions.
    • You get cashback on spending at the retail outlets.
    • Longer interest free periods ensures that there is flexibility in repayments. Business can negotiate for a better discount as they can make payments to the supplier and won’t have to ask for a credit period with them.
    • Interest rates are lower.
    • Cash advance limits are high. Some providers allow cash advance for up to 90% of the credit cards limit. This is ideal for small business owner when there is temporary cash flow crisis.
    • Lifestyle rewards such as air miles, meet and greet services, lounge access, discounts at hotels and travel, etc. This is beneficial for those who have to travel for business.
    • Dining and golf privileges help you to network with your clients.
    • Comprehensive travel insurance and fraud protection are offered. You will also get special rates on office and business insurance.
    • Most SME credit cards have partnerships with outlets in the UAE and around the world. Partnership with office stationery, car rental, office equipment and courier services will get you valuable discounts.

    Disadvantages of SME credit cards

    Following are the disadvantages of SME credit cards:

    • Early-stage businesses and start-ups may not qualify for SME credit card as they won’t meet the requirement of minimum period of operation.
    • If the monthly outstanding is not paid in full, you will incur interest and the rates vary between the lenders.
    • There are a wide range of fees applicable. You may be charged for card replacement, spending over the limit, late payment, getting duplicate statement, etc. You must read the fine print so that you are aware of the fees and charges.
    • When you withdraw cash using your SME credit card, you will be charged interest on it as there is no interest-free period for cash withdrawal.
    • The lender reserves the right to change the credit card terms and conditions without notice. You must keep abreast with the changes that are being introduced so that you know how it will affect your business.
    • There is a risk of running debt if you make a purchase which you cannot afford.

    SME credit cards vs Personal credit cards

    Personal credit cards are different from SME credit cards. The major differences are as follows:

    Particulars SME credit cards Personal credit cards
    Protection Not all purchases are covered. Consumer protection laws ensure that you get protection for purchases and against fraud.
    Interest Can change frequently. Interest free periods are offered. Cash advances are not interest free. Does not change. No interest will be charged if the balance is paid in full before the due date.
    Rewards Tailored towards business. Lifestyle benefits and rewards are offered.
    Application process time Take a long time to approve. The time taken to approve is shorter.
    Credit check Hard inquiry will be put on the credit history. Hard inquiry will be put on the credit history.
    Credit history Not reported to the credit bureau. Reported to the credit bureau.
    Credit limit The limit is higher. The limit is lower.
    Monthly statement Detailed monthly statements are provided. The statement is sent to the person who has to make the payment. Detailed monthly statements are provided.
    Due date Longer than personal credit card. Due date are shorter.

    Banks offering SME credit cards in the UAE

    Following are the banks that offer SME credit cards in the UAE:

    • CBD Business Banking credit card:

      The profit rate offered is 1.65%. The minimum annual turnover requirement is AED2,000,000. There is no annual fee charged. Balance transfer is allowed. The business has to be operational for 2 years. Cash advance allowed is up to 70% of the cash limit. You can earn Skywards Rewards Miles and cashback. Exclusive discounts and offers are available with the card.

    • ADIB Business Platinum Covered card:

      The profit rate offered is 2%. The minimum annual turnover requirement is AED2,000,000. Annual fee of AED800 is charged. Balance transfer is allowed. The business has to be operational for 2 years. Cash advance allowed is up to 60% of the cash limit. The foreign currency rate charged is 3%. There are no rewards for the card.

    • RAKBank Amal Business Titanium credit card:

      The profit rate offered is 1.67%. The minimum annual turnover requirement is AED250,000. There is no annual fee charged. Balance transfer is allowed. The business has to be operational for 5 years. The foreign currency rate charged is 2.5%. You get dining discounts, lifestyle benefits, etc.

    • NBAD Business Visa credit card:

      The profit rate offered is 2.25%. The minimum annual turnover requirement is AED1,000,000. There is no annual fee charged. Balance transfer is allowed. The business has to be operational for 2 years. The foreign currency rate charged is 2.25%. You can earn Skywards Rewards Miles and get complimentary airport transfer services.

    • Union National Bank Business credit card:

      The profit rate offered is 2.99%. The minimum annual turnover requirement is AED1,500,000. Annual fee charged is AED350. Balance transfer is allowed. The business has to be operational for 3 years. The foreign currency rate charged is 2%. There are no rewards offered for this card.

    • ADIB Business Gold Covered card:

      The profit rate offered is 2%. The minimum annual turnover requirement is AED2,000,000. Annual fee charged is AED400. Balance transfer is allowed. The business has to be operational for 2 years. The foreign currency rate charged is 3%. There are no rewards offered for this card. The card is shariah compliant. There are no rewards offered for this card.

    • Emirates Money Business credit card:

      The profit rate offered is 2.49%. Annual fee is not charged. The business has to be operational for 1 year. The foreign currency rate charged is 1.84%. You get dining discounts, golf discounts, airport lounge access, etc. Cash advance allowed is up to 75% of the credit limit. You get business protector insurance facility with this card.

    • RAKBank Titanium Business credit card:

      The profit rate offered is 1.67%. The minimum annual turnover requirement is AED250,000. No annual fee is charged. The business has to be operational for 5 years. The foreign currency rate charged is 2.5%. You get cashback on the card. Balance transfer option is not available with this card.

    • NBAD Business Visa credit card- Islamic:

      The profit rate offered is 2.25%. The minimum annual turnover requirement is AED1,0000,000. Annual fee is not charged. The business has to be operational for 2 years. The foreign currency rate charged is 2.25%. This card is shariah compliant. You can earn Etihad Guest Miles, NBAD star, Skyward Miles, and complimentary airport transfer services.

    • Aseel Business credit card:

      The profit rate offered is 2.99%. The minimum annual turnover requirement is AED600,000. Annual fee charged is AED500. The business has to be operational for 2 years. The foreign currency rate charged is 3%. The card is shariah compliant. You earn rewards and cashback for purchases made on the card.

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