Credit Card Charges in the UAE and How to Avoid them

Among the significant financial drains in the UAE are credit card charges. These can run into thousands if not kept in check. Living without these extra charges can save the cardholder a handsome amount of money in the bank. Discussed below are the standard credit card fees charged in the UAE and how one can avoid them.

Annual Maintenance Fee

Let us begin with the most standard charge: the annual fee. Most credit card companies in the UAE charge for their services on an annual basis. This amount could include a few hundred dirhams or more than a thousand, depending on the type of card and benefits associated. Cardholders, to avoid these charges can seek credit cards that do not levy such annual charges, or such cards with no charges for the first year. You can refer to detailed listings and analysis of credit cards with no annual fees in the UAE at the following link on Soulwallet.

Besides, a few banks also do some promotions or special offers wherein they waive the annual fee if some amount of spending is done on the card.

Late Payment Fee 

Another common fee is that of a late payment fee. This is a fee charged to the cardholder for not making any payment by the due date. It is a very fast-growing interest that adds up to the growing debt of the cardholder. In order not to be loaded with a late payment fee, reminders or automated settings for at least the minimum amount to be paid before the due date should be done every month. Interest is yet another key cost of credit cards. This will be applicable if the cardholder fails to pay the full balance by the due date, with an interest charge levied on the remaining outstanding balance. In the UAE, interest rates of credit cards are relatively high, sometimes going up to more than 30 percent per annum. Pay all the outstanding every month and save on paying interest.

If not possible, at least a cardholder should strive to pay more than the minimum payment to reduce his interest amount.

Cash Advance Fee

Another type of probably somewhat pricey fees are cash advance fees. These are taken for the withdrawal of cash from a credit card, normally in the form of a percentage from the cash withdrawn. Also, cash advances can have higher APRs, wherein the interest runs from the date when the advance is taken. So, in general terms, it’s good to just use a debit card or simply withdraw money from a savings account.

Foreign Transaction Fee

On top of that, even foreign transaction fees can be accrued by one using their credit card outside the country. Most credit card companies have a foreign transaction fee policy under which the customers’ transactions in foreign currencies and countries result in a small percentage surcharge of the total transaction amount. Look to get a credit card with no or low foreign transaction fees or a travel card specifically designed for use in other nations.

Balance Transfer Fee

A balance transfer fee is a charge for the Debt Consolidation, from one source to another—a credit card debt. This usually costs the cardholder a percentage of the sum being transferred. In contrast, while balance transfers may provide an excellent avenue for debt consolidation or interest rate arbitrage, the fees tackled on sometimes computed eliminate the benefit. Cardholders should look out for low or no balance transfer fee promotions or cards to avoid or reduce a balance transfer fee.

Overlimit Fees

Lastly, over-limit fees crop up as charges when a cardholder has spent beyond his set credit limit. It is quite easy to avoid this fee with some amount of control on spending and trying not to spend beyond the set credit limit. One way could be to instruct some banks that typically send a text or call alerts when a cardholder has reached his or her credit limit. Therefore, people living in the UAE should be informed about the various charges prevailing on credit cards and how they can avoid them to save cost and manage their finances much better. A wise selection of the right credit card one is comfortable with, automatic payment set up in such a way that it paid on time, and a clear strategy for spending will be a sure way to help all cardholders fully minimize these kinds of credit card fees and to fully accrue the promised rewards and bonuses that are incorporated into the credit cards.