Demystifying Credit Card Fees: Your Guide to Saving Money and Maximizing Benefits
Fees associated with credit cards in the UAE can vary depending on the specific credit card issuer and the type of credit card. Here are some common fees that you may come across with credit cards in the UAE:
Annual Fee: Many credit cards in the UAE charge an annual fee for card membership. The annual fee amount can vary significantly depending on the type of card and the benefits it offers. Some premium or exclusive credit cards may have higher annual fees. You can find a list of credit cards in the UAE with no annual fees here.
Late Payment Fee: If you fail to make the minimum payment or pay your credit card bill after the due date, a late payment fee is typically charged. The amount of the late payment fee may vary among credit card issuers.
Cash Advance Fee: When you withdraw cash using your credit card, a cash advance fee is usually charged. This fee is typically a percentage of the cash advance amount and is in addition to any interest charged on the cash advance.
Foreign Transaction Fee: If you use your credit card for transactions in a foreign currency or in a different country, some credit cards may charge a foreign transaction fee. This fee is typically a percentage of the transaction amount and is charged to cover currency conversion and processing costs.
Foreign transaction fees on credit cards in the UAE can vary depending on the specific credit card issuer and the type of credit card. Here are some points to consider regarding foreign transaction fees in the UAE:
Fee Structure: Credit card issuers in the UAE may charge a percentage-based fee for foreign transactions. The fee is usually a percentage of the transaction amount and can range from around 2% to 5% of the transaction value. For example, if you make a purchase of AED 1,000 in a foreign currency and the foreign transaction fee is 2%, you may be charged an additional AED 20.
Currency Conversion: When making a foreign transaction, the currency conversion process comes into play. In addition to the foreign transaction fee, some credit card issuers may apply a currency conversion fee or a markup on the exchange rate used for converting the foreign currency into UAE dirhams (AED). This markup can vary among different issuers.
International Acceptance: Before traveling or making purchases internationally, it is essential to check whether your credit card is widely accepted. Major credit card networks like Visa and Mastercard are commonly accepted worldwide. However, some credit cards issued by local banks may have limited international acceptance.
Foreign Transaction Exemptions: Some credit cards may offer exemptions or waivers on foreign transaction fees. These exemptions are often available on specific credit card tiers, premium cards, or cards designed for frequent international travelers. It is important to review the terms and conditions of your credit card to understand if any exemptions apply.
Currency-Specific Cards: In the UAE, certain credit cards are designed specifically for foreign currency transactions. These cards, often known as multicurrency cards, allow you to load and transact in different currencies without incurring foreign transaction fees or currency conversion charges. These cards can be beneficial if you frequently travel or make international purchases.
Over-limit Fee: If you exceed your credit limit on the card, an over-limit fee may be charged. This fee is levied when you go over the approved credit limit set by the credit card issuer.
Balance Transfer Fee: Some credit cards allow you to transfer balances from other credit cards to consolidate debt or take advantage of promotional interest rates. Balance transfer fees are charges imposed for transferring a balance from one credit card to another.
It’s important to note that these are general examples, and the specific fees and their amounts can vary depending on the credit card issuer, the type of credit card, and the cardholder’s creditworthiness. Before applying for a credit card in the UAE, it is advisable to carefully review the terms and conditions, including the fee structure, outlined in the cardholder agreement provided by the credit card issuer.
