Running a business: UAE businesses can’t let debt get out of hand
Image Credit: Pixabay

AL AIN: At my lowest, I was paying up to Dh20,000 on my 12 credit cards. My salary was Dh13,000.

It took 10 long, painful years to get out of the debt trap. I am finally debt free!

The journey was not easy.

My financial misfortune began when I got a huge pay cut. I lost my overtime pay that could go up to Dh3,000 a month. This was after I had sponsored my two sons to the UAE.

My youngest was only four years old then, the eldest was 16. I am a widow and a single parent. I wanted them to grow up with their mother so I sponsored them here while I worked in a public hospital in the western region.

Then I lost a kidney. Our doctors discovered it by chance when I volunteered to be the patient on whom they were demonstrating the capabilities of the hospital’s latest machine. They scanned me and found a tumour in one of my kidneys. It had to be removed.

The surgery meant I could no longer work as many hours as I used to. I was also transferred to a clinic. In total, my income dropped by Dh5,000 a month.

School fees. Food. Daily expenses. So I started borrowing money. I started with three credit cards and used two. If I couldn’t pay off the first card, I’d borrow from the second card.

For extra earnings, I ventured into the rental business. It was good initially but it went bust. I was forced to borrow from my credit cards to pay rent.

12 credit cards

I ended up having 12 credit cards, borrowing from loan sharks, selling all my jewellery and using all of my salary to pay off my debt.

To be clear, we did not splurge nor have an excessive lifestyle.

By 2012, my debt repayments became so overwhelming that I decided to find ways to earn extra survive.

With help from my friend, I sold homemade Filipino rice cakes and desserts. Sometimes, I’d sell ready-made meals.

Worked non-stop

My side business grew and I was getting so many orders I could barely keep up. I had to get up as early as 3.30am to cook everything before going to work at 7am. I worked on public holidays, including Christmas and New Year. I worked on weekends. I worked during my annual leave.

I worked non-stop, never taking a day off, selling one rice cake at a time to pay off one credit card at a time.

I sent my two boys home and decided to talk to banks to settle my credit cards. I used the debt snowball method where I tackled the smallest debt first. With laser focus, I dealt with the next and the next and the next.

Clearing one card was so empowering and it kept me on fire to go on.

For ten years, I did not go home to see my family in the Philippines.

I made my last payment this June.

I can now go home to see my ageing parents and celebrate my father’s 80th birthday.
If I had saved all the money wasted on my debt, interest, late payments, and other finance charges, I would have become a millionaire by now.

— Rhian G (not her real name), 50, Filipina, is a mother of two.

Here are some of the other actionable ways I used to tackle debt:

- I spoke to banks — non-stop. I was like a broken record. If customer service agents wouldn’t budge, I’d go to the bank myself.

- I read up a lot and researched the best ways to tackle debt. I asked Atty Barney Almazar, a lawyer who helps Filipinos in debt. I used information as my tool, my power.

- I used the debt snowball method which is the most effective way to clear debt.

- I called banks to remove all hidden charges in my cards.

- I requested for banks to convert my credit card balance into a loan with fixed interest rates.

- I monitored all my payments in a notebook. I keep it updated.

- I keep all my credit cards in a folder. Every time I feel I couldn’t go on anymore, I look at the ones I’ve cleared to motivate me. Now these cards represent all my battle scars. They will always remind me that despite all that happened, I can be victorious.

Janice Ponce de Leon is a former reporter for Gulf News.