A Brief Guide To Get The Best Credit Cards In The UAE

The financial sector in the United Arab Emirates (UAE) is booming. With more and more people getting into spending regularly, credit card usage is increasing as well. Credit cards are a useful tool for consolidating your debts and paying them off from a single source of income. However, they come with risks too. Misusing your credit card can result in debt accumulation and high-interest rates, which can be disastrous if you don’t manage your finances responsibly. To get the best credit cards in the UAE, you need to know how they work and understand their advantages and disadvantages before applying. The following article will explain all you need to know about the sector, how it works, and which types of credit cards are available to residents of the country.

What is a Credit Card?

Credit cards are plastic payment devices that enable you to make purchases by charging the card’s balance. They are similar to debit cards, but allow you to charge a preset amount, referred to as your credit limit. Since they allow you to charge a certain amount, they are often referred to as “credit” cards. You can use a credit card to make purchases online, in stores, and at gas stations. Credit cards are useful for buying things you’ll probably have to pay for later, like a car or a house. Credit cards also come with a host of benefits like cash back and travel insurance. Credit cards are very common in the UAE. Whether you need a basic card for shopping for small items or a premium card for luxuries, you’re likely to find one suited to your needs.

How Do Credit Cards Work?

Credit cards work by allowing users to make a purchase and then charge the purchase to their credit account. This is similar to how a debit card works, but there are a couple of differences. With a debit card, the money you put in is taken out. With a credit card, the retailer puts money in your account, and then you are free to use it as you wish, charging anything you like. Credit cards have some important advantages over debit cards. Firstly, they offer a larger financial buffer, meaning you can shop again without having to pay the same amount of money. Secondly, credit cards allow you to make large purchases without having to cough up the cash upfront. This allows you to purchase things you probably couldn’t afford without the financial buffer.

Types of Credit Cards in the UAE

Credit cards in the UAE come in four forms, depending on the type of account you have: - Store credit cards: These are similar to debit cards and enable you to make purchases from a limited list of merchants. The major difference is that the money is deducted from your account after the transaction, as opposed to being subtracted from your account first. 

 

- Personal credit cards: These are issued by banks and are aimed at individuals. 

 

- Credit cards for business use: These are similar to business credit cards in the UAE, except that they are issued by banks and are meant for use by companies.

 

- Prepaid credit cards: These are similar to traditional credit cards in the UAE, except that you deposit money into the card before making a purchase. With a traditional credit card, you spend money dug out of thin air. This is not the case with a prepaid card, where you must deposit money before using it.

The Many Advantages of Having a Credit Card in the UAE

- Easy to Get - Credit cards in the UAE are easy to get. You only need to be 18 years old, have a valid ID, and have enough income to support the monthly payments. You can apply for a credit card at any bank and start building your credit score right away. 

 

- More Flexible - With a credit card, you have the option to choose how to repay the loan. This gives you more flexibility as you can choose to make only the minimum payments or pay off the full amount (called foreclosure) at the end. If you pay off your credit card, you can get a significant discount on your future purchases. 

 

- No Interest Charges - If you pay off your card in full every month, you won’t be charged any interest. If you only make the minimum required payments monthly, this is a huge advantage as it saves you money in the long run. 

 

- Low Credit Limit - Credit cards in the UAE generally have low credit limits. While this means that your credit limit is low compared to credit cards in other parts of the world, it also gives you the freedom to make large purchases without having to worry too much about paying them off. 

 

- Travel Insurance - Credit cards in the UAE come with travel insurance that covers travellers in case of medical expenses, car accidents, and other forms of accidents. This is a useful feature as travel insurance is not usually included in debit cards.

 

What Type of Credit Card Should You Apply For?

Different types of credit cards have different perks and benefits. Depending on your financial situation, you should apply for the card that best suits you. The following are the main types of credit cards in the UAE: 

 

- Store credit cards: These are similar to debit cards but allow you to make purchases from a limited list of merchants. The major difference is that the money is deducted from your account after the transaction, as opposed to being subtracted from your account first. These are suitable for people who only need to make small purchases and pay off the balance every month. 

 

- Corporate credit cards: These are issued by banks and are meant for business use. These are the most prestigious and expensive types of credit cards in the UAE. 

 

- Personal credit cards: These are issued by banks and are aimed at individuals. These are useful for people with good credit scores who want to make large purchases. 

 

- Travel credit cards: These are issued by banks and are meant for use while traveling. These cards allow you to make purchases while abroad without using foreign currency. 

 

- Cashback credit cards: These cards give you cashback for shopping at particular merchants. Some cashback cards also offer free travel insurance.

Conclusion

Credit cards are a useful tool for consolidating debts and paying them off from a single source of income. However, they come with risks too. Misusing your credit card can result in debt accumulation and high-interest rates, which can be disastrous if you don’t manage your finances responsibly. To get the best credit cards in the UAE, you need to know how they work and understand their advantages and disadvantages before applying. The following article will explain all you need to know about the sector, how it works, and which types of credit cards are available to residents of the country.