Category: General Interest

Smart Payment Technologies: Google pay, Google Wallet, Samsung Pay etc., …what’s the big deal? Find out…

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Through the years, the modes of payment that we use to make our purchases has evolved. From copper coins to printed notes to plastic cards, and now most recently, “mobile wallets”, technology has constantly redefined the way we shop. Each of these modes has outstripped its predecessor by overcoming its downsides. Let’s have a look at the how the most recent development, smart payment technology, is going to revolutionize this domain.

How does it work?

Although there are a host of technologies involved in the background to facilitate smartphone-enabled payments, the ease with which you, as a user, can quickly onboard on to this platform and start making purchases is quite straightforward. Below are the steps for you to get started:

  • Download the payment application, such as Google Pay, Samsung pay etc. for Android devices, or Apple pay for iPhones.

  • Manually enter information about your credit card(s) or debit card(s) of participating issuers/banks in the app.

  • Set a PIN, or in some cases, where supported by the device, use your fingerprint or iris scanner to make your application secure.

  • With this, you are on your way to making your first contactless payment for your next purchase. All you have to do is tap your device on the point-of-sale terminal at your retail outlet and voila, you have just “smartly paid” your bill!

Advantages

So how would owning a mobile wallet benefit you? Read on…

  • Convenience: There is no more a need for you to scramble through your wallets for coins or notes, swipe your card, provide a signature etc. Just one tap and you can quickly checkout and walk away with your purchase.

  • Security: Your hard-earned money is as secure in your mobile wallet than anywhere else. Back in the day, if you lost your wallet or if it was stolen, not only did you lose cash but you also ran the risk of having your credit cards swiped for a huge sum by a miscreant. With a smartphone, even if you lose the phone, no one can access your mobile wallet without your PIN or biometric information. Your card information is encrypted and stored separately in a secure data-vault.

  • Privacy: Your mobile wallets do not know what you purchased or paid for; the transactions are only between you and the merchant establishment. Your credit card number, CVV and other information is never shared with the merchant establishment. The mobile wallet uses a “token” as stand-in information and each transaction is combined with this token and a one-time security code (more like a virtual account number).

  • Other Benefits: You can pay all your bills from your wallet with just one touch, be it mobile post-paid, electricity, water bills, telecom, and so on. Some digital wallets also offer you exciting reward points and loyalty benefits to encourage usage. Also, a majority of wallets can help you split your bills with your friends the next time you are at a restaurant. You can also get customized reports on your spending habits from your wallet and make better budgets.

Disadvantages

As always, there are two sides to a coin. While there is a lot of value you can get by using digital wallets, there are also a few downsides which you must be aware of:

  • Smartphone dependency: If you lose your phone or your battery dies out, you cannot make payments.

  • Limited Retail Support: It is important to note that Smart payment is an emerging technology and therefore, only a handful of retail outlets support it currently. Apple pay, a widely accepted payment in North America is still at its early stages as only 36% percent of retail outlets support it. Some retail outlets are also wallet-sensitive, like in the case of Walmart which accepts only payments from the Walmart-pay app.

  • Other downsides: In developing countries, poor internet infrastructure can cause you hassles while making payments. Smartphones (and particularly ones that support “Near Field Communication” required for smart payments) are not ubiquitous.

Cashless payments is a top government priority in UAE. From being a cash-based economy, the country is moving leaps and bounds towards being a cashless economy. This is currently driven by aggressive credit card marketing leading the shift to plastic money. Samsung Pay, Apple pay, Citi pay, Payit by FGB, NBD Pay, Beam are a few popular digital wallets available in the UAE.

It’s only a matter of time before digital payments becomes mainstream. Ride the digital wave and get yourself a mobile wallet (if you don’t already have one)!

As 2018 comes to an end, it’s time to review your wallet. Cashback, Travel or Reward Points, which credit card to choose? Here is our pick for you.

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While we are in the process of choosing a credit card, one of the dilemmas we face is in deciding which type of reward card to choose. This is a common concern especially in a market like the UAE which has more than 200 different type of credit cards.

After being in the consumer banking industry for more than a decade, I personally find this an interesting dilemma to deal with. Rewards as we all know are ways of creating loyalty by banks while encouraging higher spends on their credit cards. Why do banks reward credit card usage? The obvious reasons are to increase spend on their products while also building loyalty. Banks employ experts who work on creating reward programs to attract their customers. They identify what the customers need or value the most and design the reward programs accordingly.

Please note that we are not referring to the various features and benefits commonly offered on most credit cards. These benefits can include dining discounts, complimentary golf access, valet parking, fitness club membership and so on. Reward programs are almost standard across the UAE market while specific designs and constructs are customized by each bank. There are primarily three different types of rewards that customers can get in the UAE.

Cash back Credit Cards:

The most popular reward where customers receive a certain amount of cash back as a credit on the card based on their usage. The qualification and the reward rates may vary from card to card. This is very popular because it can be deemed to be a discount on the purchase. How does one go about identifying which is the best one?

It is important to understand that cashback rates can be different across different spend categories, there may be maximum usage caps to avail cashback, the methods of redemption may vary from fee waivers to automated statement credits and so on. Hence, it is not necessary that a credit card which offers a 2% cash back is better than one which offers 1.5%. You need to consider the following as well:

a. Does the credit card offer you the maximum rewards from a cash back perspective for ‘Your Customized’ spend, i.e. for the specific categories that YOU typically spend on?

b. How does the cash back redemption happen – is it automatic or does this need a call back or request has to be raised for fulfilment? Which credit card provides the most easy and convenient option?

c. Small print: Are there any usage caps? Are there any exclusions? Are there any specific merchant criteria? Are there any timelines? These are points to consider while choosing the best cash back credit card for you.

d. Other benefits: Does the card have the benefits that you might want -complimentary airport lounge access, movie tickets, golf offers, valet parking etc? Explore!

SoulWallet’s “Saving Simulator” tool uses a smart algorithm which can give you an excellent indication on which credit card gives you the maximum savings based on your individual customized spend.

Airmiles / Travel Credit Cards:

Did you know that 2/3rds of the world’s population lives within 8 hours and 1/3rd within 4 hours of the UAE (Source: Gulf News)? With an expat population of close to 80%, travel is not a luxury but indeed a necessity for all UAE residents. Thus, it is not surprising that travel credit cards are very popular among UAE residents. These cards are usually loaded with benefits such as complimentary airport lounge access, marhaba meet & greet services, travel insurance, hotel discounts, free flight tickets and many more features.

Travel reward credit cards give you miles or travel points based on your card usage. The benefits don’t end there as free checked bags or airline fee credits may also be a part of the rewards package. There are broadly two types of travel credit cards:

a. Co-branded Travel cards: generally these are linked with a specific airline and offer value miles which can be redeemed with a specific airline. For e.g. Emirates Skywards, Etihad Guest Airmiles and so on.
b. Bank-specific Airmiles cards: As a unique proposition offered by some banks where customers earn airmiles on their credit card spend which can then be redeemed with multiple airlines (based on the bank’s agreement with these airlines). The redemption rates may vary from one airline to another.

What are the key points to consider while choosing an Airmiles or a Travel Card?

a. Earn rate: In simple terms find out how much your spend is going to be rewarded in airmiles. For example, every USD of spend could earn you 1 Air mile.

b. Burn rate: How many miles do you need to spend to avail a free ticket or an upgrade? This might vary from bank to bank and might also include black out zones for booking with airlines.

c. Now the interesting question-do you get a joining bonus offer? There are several banks which offer irresistible joining bonus miles offers most of the time.

d. Is there a validity for these miles? In other words, do they expire if not redeemed within a specific period?

e. Benefits and Features: Does the card offer you benefits such as complimentary airport lounge access, airport pickup and drop, travel insurance, travel insurance certificates and so on. Do your research, compare all these options on the Soulwallet Credit Cards page and then make an informed decision.

Reward Points Cards:

These cards are popular among those who shop frequently. Banks offer reward points for spends incurred on their credit cards. These reward points can be redeemed in multiple ways including vouchers from your favourite malls or for purchasing, jewellery, holiday tours, electronics, beauty products and many more.

What are the key points to consider while choosing a Reward Points card?

a. Find out what is the worth of your spend from a reward point perspective i.e what is the value of 1 Reward point in AED?
b. Is there any expiry period for these points? If yes, what are the conditions?
c. Do the points get forfeited or lapsed in case payments are missed?
d. How can these points be redeemed? Is it an easy process or a complex one?
e. Does the reward card come with the required benefits as per your requirements?
f. Can you switch between different reward types?

While each of the above typesof credit cards (travel, cashback, reward points) caters to a specific need, it can also potentially be beneficial to have one of each type to maximise your savings and benefits. Provided one has a healthy credit score and manages credit card usage smartly and responsibly.

With 2018 coming to an end, it makes sense to review your wallet and see if you have the right credit card(s) for you. It only takes a few minutes to browse through the most suitable options on SoulWallet (www.soulwallet.com) and identify credit cards with the best savings for you using the “Savings Simulator”. After all, why say no to the idea of saving a few more valuable dirhams?

How to choose between Personal Loan & Salary Transfer Loan

How to choose between Personal Loan & Salary Transfer Loan

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Cash loans are a popular lending product in the UAE. These loans come in handy to service an immediate need which can be a purchase, holiday plan, school fee payment, medical expense not covered by insurance and so on. Cash loans offered by UAE banks can be classified into two categories.

a. Salary Transfer Loan: This is most probably the first loan one can avail from the bank where the customer holds a salary account. These loans are low in interest rates compared to the other personal loans without a salary transfer. Banks offer competitive interest rates for their customers for such loans. These loans generally require the following eligibility criteria.

i. A Salary Transfer letter from the employer of the customer stating that Salary would be transferred to the bank along with certain other clauses as required by the respective bank. Your HR department can help you with issuing such letter.

ii. A minimum salary requirement which might differ from bank to bank. This generally starts from AED 5000.

iii. Security checks as required by the bank.

iv. Debt ratio including the new loan EMI should not exceed 50% of monthly income which is a simple calculation of your total financial monthly liabilities over monthly income.

v. All other eligibility criteria as applicable by the bank including a meeting with the borrower.

b. Personal Loan without a Salary Transfer: These loans are offered by banks without a need of having Salary transferred. Such loans are popular and can serve the purpose when one already has a Salary Transfer loan running with a bank. Interest rates are higher for such loans and the lending amount might be lower than a Salary Transfer loan.

It is important to understand the difference between the personal loan and the salary transfer loan before applying for a loan. Reaching out to your bank which holds your salary account and enquiring for a salary transfer loan should be your first option. However, there are banks in UAE which provide attractive interest rates and higher loan amounts for the personal loan without salary transfer. SoulWallet can help you compare and choose the best personal loan and salary transfer personal loan from banks across UAE. Also you can apply for loans online.

Here are the key points to consider while deciding upon a loan?

a. Am I getting the best interest rate?
Most banks offer interest rate based on a multiple criteria like your income range, employer, bureau score etc. These rates are generally available with the Sales Executive who reviews your application profile. Make sure you review the interest rates before signing up. High interest rate means higher EMI and longer repayment period.

b. Am I getting the loan amount to suit my need?
Different banks offer different loan amounts, generally a multiple of your monthly income. This obviously can be customized based on certain criteria as mentioned in the previous point.

c. Will borrowing a loan be a hassle free process?
Loan application processing might take anything from an hour to 5 working days. Ask whether the process is simple and hassle free as this is a key differentiator between the financial institutions.

d. Are there any Hidden Charges?
Review if there are any charges pertaining to loan processing, early repayment penalty, late
payment etc. Read the fine print. Or at least ask the Sales Executive. You can always go and check comparison sites like SoulWallet.

e. What are the Payment Options?
Understand the various payment options available to you. While a direct debit from your salary
account is a standard process, there might be situations one would need to make a payment
through alternate methods. These options must be easy and inexpensive.

f. Will Top-up loan be available?
Enquire on when one can avail a top up loan while servicing first loan. Some banks have a resting
period of 6 to 12 months from the time the first loan has been issued.

g. Will there be Statement and Email alerts?
How does one get reminders on payments and loan balance? Verify this as these are important to know while servicing a loan. In today’s forgetful and fast paced life, we tend to forget the payment date. Bank might charge a penalty for late payment.

h. Any Special Features?
Does the bank offer a flexible interest loan which can adjust over a period of time based on EIBOR (which is Emirates Inter Bank Offered Rate).

So Salary Transfer Loan or Personal Loan Offers. Choice should be yours.

How to choose the best credit card?

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A credit card is a very handy tool that makes life easy if managed smartly. It is also important that one understand how a credit card functions so that maximum benefits can be realized. Given the lifestyle demands, a credit card has become one of the most basic needs of any individual. And why not? If we are to analyze the uses of a credit card, we could end up counting the multiple benefits that it offers. Well, then the question shouldn’t be about whether at all we need a credit card or not. The right question should be how to choose the best credit card for ourselves.

By some estimates, there are more than 200 different credit cards in the UAE that caters to the diverse lifestyle and needs of the customer. The dilemma that one faces is- how to choose the best credit card? What is best for you may not be the same for me. When we are confronted with such relative and conditional situations, how do we determine what goes in favor of our best financial decisions?

Perhaps we can start by asking ourselves some basic questions. Before taking the plunge and narrowing down on the credit card, it is good to understand why we need it in the first place. The purpose of having a credit card varies from individual to individual. Some people may use credit cards to see them through a period of financial tight spot whereas some might use it to manage daily finances. For some people a credit card helps maintain cash flow. And no prizes for guessing that a credit card also simply enables us to indulge in opulence- whether occasionally or frequently depending upon the user.

Whatever are the reasons for expenditure, these tips must be considered before choosing the card that works best for you:

• Spending pattern – Even before we consider having a credit card, most of us already have a fair idea about our spending habits. What do we spend a lot on? Does planning a family holiday and spending on air tickets make a dent in our pockets or is it the paying of our kids’ school fees makes up for our biggest recurring expense? Sometimes events or entertainment can also count as our biggest spends and for some people expenses towards purchasing of grocery and utility are the heaviest. Hence, spending pattern is an important element while choosing the best card. There are various benefits offered by credit cards in the market which vary from a spend category perspective. For instance, one might get a higher loyalty reward (air miles, cashback, points etc.) on a certain spend.

• Annual fee: Depending on the card you choose you may have to pay an annual fee. Certain high-end cards offer additional benefits and their annual fees are also higher. You can weigh and decide if the benefits are worth the cost. However, there are some credit cards that don’t have an annual fee. Also, the bank will sometimes set a minimum amount for you to spend to remove the annual fee. You must enquire in details with the bank about the fees structure and terms.

• Instalment offers- To make the experience of owning a credit card more fruitful, a number of leading banks offer interest-free instalment schemes on purchases. Before purchasing an item, do some research to check which cards have the best instalment options. These installment plans make it easier for customers from a re-payment perspective. Most banks have attractive promotions interest rates for such installment plans.

• Benefits and rewards- There is no harm in being pleasantly surprised to learn about the benefits later but an informed choice can prove more advantageous. At the time of zeroing upon the credit card, enquire about the enjoyable aspects that your credit card offers you- the array of benefits and rewards. You can prefer to choose from a variety of cashback on purchases, movie ticket deals, air miles, discounts on school fees, dining discounts, complimentary valet parking and reward points redeemable on shopping or dining vouchers and retail merchandise. Some credit cards come with travel and lifestyle perks, such as airport lounge access, health club memberships and golf privileges to name a few. There is significant value in these benefits for customers and hence a detailed comparison of such rewards and benefits is key while choosing your next credit card.

• Incentives: Many banks offer reward programs on their credit cards and they don’t charge extra for the program. Now is that not a benefit to fall for? A program that offers flexibility of cash or travel and further gives rewards that are simple to redeem are the most beneficial. Be smart and cautious while choosing as these programs are subject to limits and conditions. It is also important to note that attractive rewards need not be the sole deciding factor, one must also review the process of redemption of such rewards. Automated redemption of rewards is a good point to look for while shopping for a credit card.

Islamic banks are Sharia-compliant so interest or profit is not charged on the outstanding amounts This might be an important factor to consider while choosing your credit card.

Looking up multiple banks’ website to know about credit card features is a thing of the past. SoulWallet collects and analyzes information about various credit cards – all in one website at your disposal. Afterall, one must always devote some time on research and verification to choose the best credit card.

How to improve my credit rating?

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Having a good credit score plays an important role in your financial life as this determines your credit worthiness. This helps the lender or the bank to assess the credit risk of a prospective customer by predicting their ability to repay the debt.

The 3 digit number that determines your credit score practically becomes your identity to the bank while you plan to borrow money. The credit score reflects the potential borrower’s past and present financial behavior which further helps the lender determine if you are a low credit or high credit risk customer. Having a low credit score has an impact on the application decision when it comes credit lines, loan amount etc. This could also make borrowing a difficult scenario in case you have an emergency financial requirement.

Building a good credit score takes time. It is important one understands what steps to take to maintain a healthy credit score. The Credit Bureau collects data on your financial history and scores you accordingly. In case of late payments on EMI or defaulting, the data gets recorded which eventually plays a negative role in your credit ratings. On the other hand, when a person has a good credit history, he might get rewarded by having to pay lower interest rates on loans.

As important it is to gain good credit, it is equally important to maintain it. Your credit score can manipulate certain situations in your life. As some potential employers may refer to it as an assessment metric and conclude if you are a right fit for the organization. Insurance companies also check the credit score as an indicator to set premium.

Amidst all the things that we need to worry about, how do Rating Agencies keep a check on our credit rating? It’s not all that difficult to attain.

Firstly, to understand your credit rating one must get a copy of their own credit report. The report gives an exhaustive picture of their credit history. It shows the payments made over the last two years plus any payments that are outstanding or overdue. One can also check for the records of any missed or defaulted payments in the past.

Having this report handy enables you to judge your expenditures and lets you decide where to draw a line. This way it becomes easier to manage finances and you can reduce or completely eliminate the act of defaulting to make your credit score better over a period of time.

Here are a couple of simple and easy steps you can take to maintain a good credit score and use it to your benefit:

1)  Timely payment– Missing or delaying a payment beyond the due date is a trigger for the rating agency to score you low. Sometimes you can be tempted to pay just the minimum amount due on your credit card as this is a temporary relief on your monthly financial obligation. This increases the length of time required to pay back the actual debt and may have implications on your credit score. Paying off a higher portion of your credit card debt will lower the debt burden ratio and eventually lead to improving the credit score. Banks feel assured that you can manage your money smartly and you appear to be less of a risk while borrowing money.

2)  Manage your credit cards well– it could be a great lifestyle statement to own several credit cards in your wallet with high credit limits. This can’t be termed a bad practice as it alone does not damage your credit score. What counts is the way you manage them and under what circumstances you obtain them. Multiple credit cards mean a higher sum of total credit limit and this goes towards adding to your debt ratio irrespective of outstanding balances. Cancellation of credit cards to avoid bad credit would not help because it shortens the credit history. Banks deduce you as a risky borrower when they are unable to see your long term credit history.

Keeping a good credit rating and maintaining it is not an unachievable feat. With good financial habits, one can achieve a high credit score. A good credit behavior is often a lifestyle choice. There is no formula.  But losing your financial health can set you back by a long margin. The journey to correct it can be a tedious and lengthy one. Being punctual with finances will yield a good credit rating score.

UAE uses Al Etihad Credit Bureau. You can get a copy of your credit report by visiting one of the Customer Happiness Centers by providing an Original Emirates ID card and passport copy. There is a nominal charge for the issuance of the report. For locations please visit Al Etihad Credit bureau website.

Why do I need a credit card?

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From a general perspective, a credit card may seem like just another tool to help you make purchases, but it can have a lot many things to offer. If we use it responsibly, a credit card can help us build a good credit history, allow us to get loans at favorable interest rates, cheaper insurance and even buy us a flight ticket for our next dream vacation. With the trend going towards using less cash, people are quickly turning towards credit cards to furnish financial requirements. Credit cards can also go an extra mile and help you earn rewards on your everyday purchases and protect those purchases in case of theft or damage. Simply put, a credit card can be a lot more useful compared to other means of payment if you use it the right way. If adhered to smart practices and good spending habits, a credit card can be a great financial tool.

Shall we start counting the numerous benefits that come with the usage of credit cards?

First and perhaps the most important benefit of a credit card is that it will help you build your credit.Good credit has its own benefits that play a vital role in our financial planning.

How about having a card that gives you a cashback every time you or your spouse shop from it? Sounds irresistible, doesn’t it? Why would you shop with any other mode of payment when a credit card payment helps you earn in return. In addition, the issuers of the credit cards monitor transactions and can alert you if somethings seems suspicious. This definitely helps to avoid fraudulent transactions in today’s times.

Is it not tempting enough to receive travel rewards or a special discount on the tour package of that dream vacation? Also if you’re traveling in a foreign country, most of the merchants would not accept your debit card even if it is from a world renowned bank. Under such circumstances credit card is the only answer especially when traveling with cash is not a great option nowadays.

Other benefits include valuable rewards in the form of miles, points and cashback. Credit cards can also offer you perks such as extended warranties on electronic gadgets, purchase protection and car rental insurance, etc. These perks are too silly to miss out on.

Has it ever happened that you have lost the wallet from your pocket? To lose your wallet full of cash means never setting sight on the cash ever. But having credit cards in your wallet saves you from losing nothing but the wallet with a plastic credit card inside which has no value without the PIN number. Just ensure you swiftly report the loss of the credit card with your bank to avoid any hassle.

All of us at some point in time have the need to borrow. If we own a credit card, it is by far the cheapest means to borrow. With the knowledge of how to use a credit card and with the right one in your pocket, you can borrow and pay it back at a later date. There are options of credit cards that help you borrow interest-free on purchases. We only have to choose the right credit card based on our needs.

At times when we pay by cash or debit card, the money is just gone immediately but payments made by credit cards help the money remain in your account till we pay the credit card bill. Having the funds in our account can prove beneficial over the longer run.

Good value’ has become a universal language. Banks are competing to provide the best of offers on their credit cards. Aimed at setting a new standard in the lifestyle of their customers- a lifestyle that reflects and suits the personality- these offers try to provide an advanced level of luxury and convenience. These are designed to suit different interests and concerns of individuals.

No matter which financial bracket we fall under, isn’t it always a joy to find a good deal? With offers on credit cards, you can be assured that your hard earned money will help you reap more rewards each time you make a payment using the credit card.

So making a shift towards using credit cards is the way forward. With a disciplined usage, credit cards are the best way of making financial transactions. If done the right way, the combined power of having valued cash in hand along with the rewards and buyer protection will put you miles ahead in the race.