Monday, 10 August 2015

Why UAE’s buying more credit cards

Credit cards are the most convenient spending option in the UAE. Know what you’re buying it for before you make the purchase.

Ask anyone who owns a credit card, and they’ll tell you that it’s the most convenient accessory to carry in one’s wallet. For one thing, a credit card eliminates the need to carry around wads of cash. For another, one can make even large purchases and repay the money on the card at a later date.

All over the UAE, more and more people are opting for credit cards offered by premier banking institutions. These are helping businesses run faster and within an environment of security. Cashing in on the trend to purchase credit cards, all major banks and financial institutions are offering credit cards at the best rates and with several benefits to customers.

The best credit card offers in UAE encompass a variety of benefits to customers, such as rewards for shopping at certain outlets and during certain times of the year (such as special occasions like Ramadan). Others offer cash back on shopping above a certain limit, while still others offer a cash back no matter how high or low the spend.

When looking for the best credit card offers in UAE, the first thing you must study is the rate of interest you are being charged by the bank, and all fees on the card (such as annual fees, late payment fees, closure fees and penalties, if any). However, steer clear of anything ‘free’ tacked on to the proffered card – nothing about a credit card is ever free. If some fees are ostensibly waived off, be assured that they will be adjusted somewhere else, so you are actually buying a card on the promise of freebies that don’t really exist.

What many credit cards offer

The best credit card offers in UAE include such rewards as free movie tickets over a certain amount of purchase, and other equally attractive rewards. Some will give increased talk time on the mobile phone tariff, others will give assured cash back with every purchase, etc.

However, apart from the rewards and minor benefits of purchasing credit cards, there are some major advantages as well. You can avail of such benefits as balance cash transfer and loans against the credit card. Additionally, your credit card can come in handy to make large purchases on an equated monthly basis.

What to watch out for

When you purchase your credit card, find out the time frame to repay every month. The credit card statement and bill is normally issued in a monthly cycle; keep these dates in mind before you make large purchases every month. Do not default on credit card repayments; this can land you in a major financial soup.

As such, it is advisable to use a credit card only when you don’t have ready cash or when all other avenues of spending have been explored. Most people fall into the ‘plastic money’ trap rather badly – they spend against their credit cards recklessly and are soon unable to make their repayments. If you are not completely in control of your spending, it is better to opt for a debit card.