Dubai: Between paying phone bills, rent and car installments, expenses easily add up for most residents. For that reason, the UAE Central Bank's announcement of a possible cap on credit card interest rates at 18 per cent was welcomed by Gulf News readers.
Adel Yousuf Al Attar, a frequent credit card user living in Dubai, said, "This is good news. Banks used to give credit cards left, right and centre, without considering the other credit cards and payments people are responsible for. Expenses are so high nowadays and people don't earn as much. It will help a lot."
He added: "The cap needs to be good for people and the banks."
Eappen Elias, a logistics manager from India, also saw the possible cap as a good move. "If it is 18 per cent, that would be a good decision. It will especially help expatriates pay off loans if they make this move."
Areej Joma'a, a Canadian-Lebanese baker, said lowering the credit card interest rate would help people pay for their expenses. "This move will help people who don't pay their bills in full amount all at once. It helps lots of people, especially with the burden of other expenses; it will make a big difference."
Whether people struggle to pay their loans or not, Avnish Gupta thinks introducing this interest rate cap will be great for consumers.
Gupta, a healthcare consultant, said, "It's good for the consumer. So, it is definitely a good rule. Whatever the new rate is, it should match the benchmark within the region."
Almira Sison, a secretary in Dubai, said that even though she regularly pays her bills, the cap on interest rates will be helpful. "Paying bills will be easier.
It should be even lower to help other people who have big loans to pay off."
Debt exposure
In November, provisions for non-performing loans at UAE banks reached a record high of Dh53.2 billion, up 20 per cent since the start of 2011, the latest Central Bank data shows.
The exposure of UAE banks to the sovereign and private sector debt in crisis-hit Europe is small and their capital adequacy ratio was around 11 per cent, Central Bank Governor Sultan Bin Nasser Al Suwaidi said in October. Analysts polled by Reuters in December expected the UAE economy to expand by 3.9 per cent in 2011, before slowing down to 3.1 per cent this year on a weaker global growth.
