Once you have your bank account, you can apply for a credit card. There are a bewildering array of credit cards available in the UAE, all offering different terms of service, annual fees and interest rates, so comparing the options will get you the best deal out there.
Your credit limit will be linked to your salary – most will ask for a minimum salary of AED 5,000, with the limit set at two or three times your salary. You can however set your own limit to keep the repayments and your spending manageable. If you do exceed your spending, it’s worth meeting with the bank to ask to transfer the outstanding balance to a loan. This will lower your interest payments and allow you to pay off the card quicker.
Visa and Mastercard are the most issued credit cards in the region, while charge cards like American Express and Diners Club are available, although less widely accepted.
Annual fees often begin at AED 200 and can go into the thousands, and there are a range of benefits on offer. Some will issue travel insurance, cash-back plans, travel discounts, free rounds of golf, restaurant discounts and more. Interest free installment plans are also available on large purchases like flights.
Interest rates are generally high, and paying off the balance of your card every month will keep your costs down. The lower the balance you pay, the more interest you’ll pay on top, which can lead to spiraling costs. Many banks will send you an SMS for each transaction which helps you keep on top of your spending, and also helps draw attention to any credit card fraud. If your card is lost or stolen, report it to the bank and police immediately – your liability is limited until you report the loss.
You can use your credit card to withdraw cash from an ATM, but you’ll most likely pay a penalty for doing so.