Credit card debt in the UAE 2020.
If you have been living in the UAE chances are that you are aware of the high-interest charges on personal loans and credit cards in the UAE. Now with the job losses and salary cuts More and more people are now getting trapped in an endless loop of EMIs and Minimum Dues. Although we are in the middle of a pandemic the rules of borrowing have not changed, below listed are 5 steps you can take to stay out of credit card debt in UAE and settle the dues.
1. If you can’t buy 5 of them, you can’t afford it.
The biggest reason that people get into the trap of credit card debt in UAE is that people use credit cards to make purchases they cannot afford and hope that they will have the money shortly.
There always is an unexpected expense around the corner when you are living in the UAE and as a result you not able to pay back before the bill.
2. Settle credit card debt and dues before leaving the UAE.
No matter how small the amount may be or how tempting the idea of leaving without paying may be, do not do it. The banks will continue to add interest and charges towards your account and the outstanding will keep increasing.
The banks will chase you for it, no matter how small or big the liability may be. Banks as part of their process will have to give your accounts to a recovery agent or a debt collection agency.
In due course depending on the bank and amount of the liability that you may have defaulted on the bank will bounce your cheque. Which may eventually result in an Interpol Red Notice, or a Travel ban.
There have been several instances where the customer is approached or apprehended after more than 20 years of leaving UAE. The banks are continuously trying new ways to recover their money, from completely selling their bad debts in UK to legally take over the customers assets, especially in countries like India it is now legally possible to enforce an Emirati court ruling.
3. Use the credit card for its perks and points.
Many of us use a credit card only as a replacement for cash, what we want to do is to use the credit card when it gets you some form of cashback, interest-free EMIs, discount, or points which you may reimburse for vouchers or gifts.
Some credit cards give you extra points when you use it for online transactions, some at gas stations, and other specific outlets. Use these accordingly to your benefit.
4. Don’t wait till the due date to settle credit card debt in UAE.
If you have the funds to pay off your dues, do not wait until the last day to pay off your outstanding, pay it as soon as you can or at least a week before the due date. This way get the benefits and perks of the credit card and you make a habit of spending only what you can afford.
5. Avoid paying the minimum due.
Many times in a case where you cannot pay the outstanding amount due, people make the mistake of paying just the minimum due, doing this does not reduce your outstanding amount its simply help you maintain the same credit score until next time. Unless you need to maintain a good credit score it is of no use at all for you to pay this amount. Always pay the complete outstanding if not at least half of it.
