Credit card cut Emergency fund 092
Don't let every 'emergency' become an excuse for credit card use. Instead, keep an emergency fund and make it a part of your monthly budget. Image Credit: Gulf News File

Does a credit card always leave you with a debt or a liability? Popular opinion in the UAE is that using a credit card can leave you penniless and in debt, but have you given a thought as to why this maybe happening?

In reality, a credit card need not spell bad news. If you know how to use it wisely, it could well work to your advantage.

181128 credit cards
Image Credit: iStock

Make your credit card work for you

According to Deepak Ahuja, ceo, Nadia Global Training & Recruitment and someone who has worked in the retail banking industry for 20 years in the UAE said: “Credit cards are a convenient way to pay for things you want, but this convenience can come at a cost. Avoid costly fees and interest by following these tips. Keep track of your spending, Pay your credit card on time, maximise your credit card repayments, set a sensible credit limit, don't use credit to make ends meet, use store cards wisely, check your credit card statement regularly, close your credit card properlyyour credit card can prove to be a huge asset.”

“Your credit card today is not meant for just borrowing or stay indebted. It is meant for you to use it wisely and avail of the benefits that come on the card,” said Ahuja.

He said whether they are loyalty cards or credit cards, for a minimum spend there are several benefits that come along with this.

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“For example, some cards give you a free one golf round per month, free gym usage, unlimited airport lounge access, free airport pick up and drop, discounts on travel / hotels etc. You just need to look for them and use them properly. Not to mention the reward points that come with a card can actually be very rewarding.”

Deepak Ahuja, ceo, Nadia Global Training & Recruitment Image Credit: SUPPLIED

Tips that work

Irish expat Darren Farrell is someone who has learnt how to get it right with his credit card.

The senior manager at a private firm in Dubai travels a lot from work. And he uses his credit card to purchase airline tickets, book hotels, pay monthly groceries and shopping, literally, all his personal expenses are met using his credit card.

Credit card
Beware of fraudsters using your credit cards Image Credit: Gulf News Archives

And what does he get in return?

Hundreds of thousands of reward points which he exchanges to buy various items. There is not a house-hold appliance which Farrell has not picked up using his collection of reward points.

As an example, Farrell owns a card from Abu Dhabi Islamic Bank (ADIB) that came with zero annual fee. The card has come with other benefits including 5,000 sign up reward point. For every dirham spent, there are 1.5 reward points earned.

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There are other benefits like 200,000 sign up reward points, discounts on hotels, cashback on flights, complimentary golf round for the card-holder and friend, unlimited complimentary VIP airport lounge access visits for card-holder and a friend, exclusive dining offers, free valet parking among others.

In the last couple of years that I have owned a credit card, I have bought my TV, washing machine, cooker, micro-wave – all with the reward points collected. One time, my reward points even fetched me two return flight tickets.

- Darren Farrell

Farrell said on an average, his monthly spend on the card is between Dh20,000 and Dh60,000. The card is used for paying all my personal expenses. The other good thing about my card is that when I travel, the reward points go higher and I tend to travel quite often. All this adds up.

“The key is to repay your card on time. Never borrow on the card and learn not to over-stretch yourself,” advised Farrell.

Sensible credit limit

Another Indian expat, Veena Sukumar, a homemaker said she uses her credit card wisely.

“The way I handle this well is that I do not keep a huge limit on my credit card. In fact I have taken the conscious decision with my bank to reduce the limit on the card to Dh5,000 a month. It was previously Dh10,000.”

“I am so careful not to spend more than necessary on my card. I stay within my limits and repay the card on time. It is important to use your credit card properly and wisely. There is no point cribbing about being in debt if you are not taking the right decision with your card,” said Sukumar.

“I only wanted a credit limit of Dh5,000 but the bank chose to give me a higher one. I made sure to get this reduced with the bank. Many times financial institutions dump credit cards on people. Banks tend to dump cards on you even if you do not want them. So return it to them and make sure they are cancelled,” said Sukumar.

Ahuja could not agree more. He advised credit card holders to set a sensible credit limit and pay on time.

Benefits of a credit card

Cash back

Banks offer cash back opportunities if you use your card to pay monthly bills (electricity) or grocery purchases. Use them to your benefit. Many online shopping portals also have cash back offers on various products which can be very beneficial.

Reward points

This is a major advantage. Several card holders in the UAE are taking time to see the various offers available on their credit cards and how they can earn points or rewards with their credit card purchases.


If you are making a big-ticket purchase (TV, refrigerator, laptop), you can easily convert it to affordable monthly instalments. Banks usually charge interest for conversion to EMIs.

Grace Period

One of the main advantages of using a credit card is you can defer your payments till your bill is due. The key here however is not to push the date. Then you are liable for a deferral fee which can cost you money and negate any benefit you may have availed on your credit card.


Credit cards are safer than debit cards as in case of fraud you are not out of money immediately. Payment gateways like Visa, MasterCard offer additional password protection while using the cards online.

Source: Nadia Global Training & Recruitment