Being an expat in the UAE can be exciting. There are lots of things to do—shopping, traveling, eating, spending free time at a coffee shop, and so on. If you are residing in the country, you will notice that most expats here are using their credit cards when they are outdoors, especially in malls or other shopping centers.
Credit cards are known to be more beneficial in many ways rather than using cash as payments. In this blog, you will learn more about it and how you can make it a good part of your expat life in the UAE.
How does a credit card differ from a debit card or bank account?
Many expats, especially those who have not used credit cards in their lifetime are struggling to tell the difference between credit cards and debit cards. If you are in the same spot, it’s actually easy to tell.
Credit cards are loans in the form of cards. But unlike other debts, the credits are easily accessible. When you use a credit card to buy something, the amount you spent will be accumulated for a month and you will be given a due date to pay for it. So basically, the money you are spending through your credit card is owned by the bank. You are just borrowing it for a short period of time.
Meanwhile, debit cards are representations of your bank account. Your ATM card is a debit card that can also function as a payment method. But unlike credit cards, you are not borrowing from the bank. Before you can use a debit card, your account should have funds in it. Else, your card will be rejected when you make payment. You are basically spending your own money. There is no due date and no required payment.
How to apply for a credit card in the UAE?
Choose the type of credit you want to apply for.
There are different kinds of credit cards for expats in the UAE. If you are on a budget, these 5 credit cards will work best for you: cashback, rewards, travel, movies, and internet credit cards. Each has different benefits for the user.
With cashback, you will basically earn back the portion of what you spend. For instance, if you spend AED 1,000 and your card states that you the cashback is 10% of it, you will only pay the principal minus the 10% on your due date.
If you are going to get a rewards credit card, you will earn points instead. These points can be used to purchase items if you can accumulate enough. Sometimes, banks offer promotions where you can earn more rewards when you spend a minimum amount.
For travel credit cards, you will earn airline points that can be used to buy airline tickets. This is exclusive to expats who want to travel around the world since the points to be earned can only be used in airline companies. If you are planning to travel soon, this is the best way to save on your travel budget.
Movies credit cards are used by expats who are fond of watching movies at cinemas or theatres. Here, your points can be turned into movie tickets if you have enough credits stored in your card.
Lastly, internet credit cards are those that can be used safely online. They have added protection and most of them can only be used when you shop on the internet.
When choosing the right type of credit card for you, make sure that you define the purpose of its usage. If you want to travel, go for travel credit cards. If you will use it merely for shopping, go for rewards type. There are factors to consider. Don’t ignore them.
Prepare your documents.
The next step is securing the documents needed when you apply. Before you go to a bank. Prepare the following documents:
- Completely filled out credit card application form
- A photocopy of your passport not expiring within the next 6 months
- A photocopy of your residence visa
- A photocopy of your Emirates ID or labour card
- Latest payslip or certificate of your salary
- Your bank statement for the last 3 months
- Security cheque if required by the bank.
Go to your desired bank and submit your requirements.
Some of the banks offering good credit cards suitable for budget expats are Dubai Islamic Bank, Arab Bank, Dubai First, Emirates Islamic, HSBC, and Citibank. Actually, you can apply to a local or international bank. Both of them are offering promising rates but it will still depend on your preference. If you don’t want to add extra expenses annually, choose a bank that offers credit cards without annual membership fees. The information is very accessible now that there is the internet. You can just head to the website of the bank and search for credit cards that it offers to expats.
Wait for the approval.
After submitting your application, the next thing to do is to wait for the approval. Usually, it takes 5-10 banking days before you can get a reply from the bank. They will either send you an email or text message telling you if the application is approved or not. If approved, you will have to wait another couple of days for the delivery of the card. If rejected, don’t worry. You can apply in other banks or wait for months before you can re-apply.
Start using your credit card.
After the delivery of your card, you can start using it as a payment method. To use it properly, make sure to follow the instructions of the bank regarding the activation, your monthly spending limit, the interest rate, the payment due date, the late fees and charges, the annual membership fee, and so on. You also need to be vigilant when using your credit card. Make sure that you are not disclosing the details of it to someone whom you just met. Be present when the salesperson is swiping your card on terminals in malls. Don’t use it online especially on suspicious websites.
Final Thoughts
Credit cards in the UAE are easy to get. As long as you have the complete set of requirements and the bank can see that you are capable to pay, they will approve your application faster. When using your credit card, just ensure that you are only utilizing it for its intended purpose. Don’t make it an excuse to overspend. You still need to consider your monthly budget. Avoid spending beyond your monthly salary to avoid facing financial struggles in the future.