Credit Cards

Surge in UAE credit card applications for Q1 2017

UAE credit cards

Despite a growing appetite among UAE residents to obtain credit cards in the first quarter of 2017, approvals for new credit cards were more difficult to come by than they were last year, according to the latest analysis from yallacompare, the Middle East’s leading comparison site.

Using data gleaned from its credit card comparison platform, yallacompare can reveal that there was a 65% increase in the number of UAE residents applying for credit cards in the first quarter of 2017, compared to the same period last year. However, along with an increase in the number of applicants, the first quarter of 2017 also saw a drastic increase in the number of credit card applications (102.4%), compared to the year-ago quarter.

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On average, yallacompare’s UAE users applied for 3.25 cards each in the first quarter of 2017, compared to the average of 2.07 applications per user seen for the full year in 2016.

“This suggests that, as we saw with personal loans towards the end of 2016, those seeking credit in the UAE may be having to work harder to secure it. Such an increase in the number of applications per user tells us that, rather than simply applying for the credit card they want, UAE residents are being forced to shop around for the credit card that they can actually get an approval for,” said Jonathan Rawling, CFO of yallacompare.

“As we said in our 2016 report on personal loans, the liquidity crunch caused by the low oil price has affected regional banks’ appetite for giving out credit. Couple this with the widespread adoption of credit reports from Al Etihad Credit Bureau in the UAE, and you have an environment that sees only the most credit-worthy individuals approved for their first-choice financial products.”

Indeed, it would appear that UAE residents have adjusted their expectations in line with these new realities. The most applied-for credit card in the first quarter of 2017 was a relatively low-end product with no annual fee, and a minimum salary requirement of just AED 5,000 per month. That’s compared to the same period last year, when the most applied-for card was a premium offering with a minimum salary requirement of AED 20,000 per month.

Still, two premium products managed to retain spots on the top five most-applied for list in the first quarter of 2017, compared to just one premium card in the same period last year. The American Express Platinum Credit Card and Standard Chartered’s Visa Infinite Credit Card came in second and third respectively. Both have relatively high minimum salary requirements and annual fees, but both come with plenty of rewards for travel, leisure and dining.

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“This would suggest that, although many residents have set their sights lower in the hopes of simply gaining an approval for their credit card, many others are beginning to see the benefits of higher-end cards – if they have the high salary required to get one,” explained Rawling.

“This makes sense in an environment being driven by banks being selective on who they lend to. They have been willing to offer better perks for more credit-worthy individuals, because these individuals make for the best credit card customers. As a result, we expect applications for higher-end cards to continue growing, as more credit-worthy individuals seek to take advantage of their buying power. Meanwhile, we expect more basic cards to continue growing, too, as UAE residents hungry for credit take on the cards that they’re eligible for.”

TOP 10 CREDIT CARDS BY NUMBER OF APPLICATIONS, Q1 2017

1)         Citibank Citi Simplicity Credit Card
2)         American Express Platinum Credit Card
3)         Standard Chartered Visa Infinite Credit Card
4)         Standard Chartered Titanium Credit Card
5)         ADIB Cashback Visa Platinum Credit Card
6)         NBF Islamic Infinite Credit Card
7)         Citibank Citi Life Platinum Credit Card
8)         Union National Bank Internet Credit Card
9)         Noor Bank Best Rate Credit Card
10)       DIB Johara Gold Credit Card

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