While taking out personal finance and credit cards can be hugely beneficial, it is important that consumers take into consideration a number of factors before doing so, according to Waleed Barhaji, Business Head of Consumer Finance at Noor Bank.
Speaking to yallacompare.com, Barhaji said that there are several points that borrowers should take into account when looking to secure finance or a credit card. He explained that following a few simple steps would allow borrowers to gain the maximum benefit from their finance.
“Personal finances are beneficial and have a variety of purposes – they can be used for home improvement, paying off education or health expenses and much more. Make sure that you are [securing] personal finance for the right reason. Choose a personal finance option that gives you the amount that you need; don’t opt for ones that give you excess,” he said.
“Disclose all your liabilities to the bank you’re applying from, so that they can support you in taking the right decision about your finance and how to repay it. Review all terms and conditions before you sign the finance agreement. Stay alert for hidden charges. An alternative is to avail Islamic personal finance, which offers a fixed profit amount for the entire contract period.”
Barhaji added that, similar to personal finance, credit cards offer several advantages. For example, he said that credit card holders do not need to worry about carrying cash in hand, and often benefit from incentives like cashback from retailers and hospitality organisations.
However, he also said that consumers need to be aware of a number of points before signing on for a credit card.
“When using credit cards it is vital that you remain vigilant and disciplined with your credit card expenditure. If you lose track and carry forwarding payments, you could be charged with high profit rates, which can be much higher than a personal finance,” he said.
“Be wary about credit card fraud when using cards. For example, phishing, skimming, data theft, physical manipulation at ATMs, are common issues that occur in the UAE. And as with finance, review all terms and conditions before you sign any agreements and watch out for any hidden fees. Check your account balance weekly if possible. By doing this, you will remain aware of your expenditure and will not overspend. Maintain a good credit history on your cards. This is important when it comes to renting an apartment, buying a car or taking out a financing.”
Barhaji’s comments came after the news that the UAE cabinet had approved a new draft law on bankruptcy in the country. However, it has since been revealed that no added protection will be extended to private borrowers as a result of the law. This means that private individuals are encouraged, as ever, to borrow responsibly and to ensure they keep on top of payments.
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