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Customers find it difficult in giving credit where it's due

They have been described by people who have gone deep into debt as their 'worst nightmare', but credit cards or plastic money

  • By Fatma Salem, Staff Reporter
  • Published: 23:15 September 21, 2007
  • Gulf News

  • Most people hold credit cards for convenience, while a large number of people use it to delay payments and enjoy the present at the cost of the unseen future.
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Dubai: They have been described by people who have gone deep into debt as their 'worst nightmare', but credit cards or plastic money are useful only if you know how to use them properly.

"I am a gambler by nature," says Nawaf Al Sharif, a 27-year-old self-employed Emirati, who has been holding two supplementary credit cards since he was 15. "I am not exaggerating when I say I cannot live without a credit card. Currently I just carry five cards," he said.

"In today's society you cannot live without credit cards," said Al Sharif. "I take this example to support my point. Once I tried to rent a car and the sales person insisted on getting my credit card number. I always carry my credit cards, not all five, but at least two, with sufficient funds in both."

He also said the card is useful when sometimes he forgets to withdraw money and wants to buy the latest product.

Rimon Asaad, a 32-year-old from Lebanon, works in the private sector and feels that its is better to stick to your budget when purchasing something. "I am not a risk taker or a showy person. Many people nowadays bring trouble onto themselves ... just to show off to others. I don't know whom they are trying to impress. I always use my bank's ATM card. It's a carefree method of payment."

Nahla Al Suwaidi, a 22-year-old Emirati college student, describes credit cards as her worst nightmare.

She said she was 'chased' by a bank's sales person for almost three weeks. "I was hesitant to get a credit card because my friends had warned me of its constant troubles. One time I used it at a mall in Dubai. The cashier said the line was down and I had to ask my friend to pay for me.

"It was an embarrassing situation ... I think the electron card is much better and safer. Well, if you have sufficient funds, it will work, if you don't, then it won't, it is as simple as that."

Interest charges

Tayseer Ahmad Saleh, a 27-year-old Jordanian doctor, warns that if you don't act wisely, you will end up trying to settle the high monthly interest charges. "Learn to hold the stick from the middle, as the Arabs say," he said. "Learn how to control your expenses according to your monthly income."

He said he has an international credit card and usually settles the bill in full in the first week of the month. "Otherwise, the interest would keep accumulating," he said.

The credit card is useful, at times, when he hears about a promotion in a restaurant, where you get a 20 per cent discount or some valuable gift voucher. "But mostly I depend on my electron card. The best part is that it is interest-free."

According to a MasterCard report, UAE residents hold about one-third of credit cards in the region. There are 2.4 million credit cards in circulation in the UAE for a population of about 4.5 million. Total credit card dues topped $2 billion [about Dh7.3 billion] at the end 2006.

Most people hold credit cards for convenience, while a large number of people use it to delay payments and enjoy the present at the cost of the unseen future. Is a credit card now a necessity of modern life?

A plastic card is not a gift from the bank. It is a credit facility. People must remember that a defaulter is subject to legal consequences, said Jamal Al Jasmi, Manager of Emirates Institute for Banking and Financial Studies.

It is the responsibility of the cardholder to get acquainted with all the facts and procedures relating to settlement of the balance, he explained.

Statement balance

In most cases the customer just looks at the benefits and offers and ignores the other aspects of the product. If a bank offers a free for life credit card with 1.5 per cent interest charge, the customer must know what he is getting, he added.

What the sales person will not tell you is that this rate will be operational from the first purchase date if the current statement balance is not paid in full. It might happen that you have to pay more than Dh150 on Dh3,000 credit.

According to one study, people now have two to three credit cards from different banks. The huge growth in credit cards can be attributed to the rising costs and incomes in the country. There has been an increase in rents, education and other costs in the UAE. Holding a credit card has become a necessity in many cases.

Kashef Suhail, Vice President of Retail Banking Group at Mashreq Bank said, after the card is sold, our telemarketers make a welcome call to the customers and explain the features, benefits, pricing and other terms and conditions.

If any customer talks about any false promise made to him by any sales person, it is immediately addressed and strict action is also taken.

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