UAE residents finding it harder to get approval for new credit cards – report

UAE residents found it harder to get approvals for new credit cards in the first quarter of the year, according to a new report from comparison site compareit4me.com.

The report stated that there was a 65 per cent year-on-year increase in the number of UAE residents applying for credit cards in the first quarter of 2017.

But there was an even bigger increase in the actual number of credit card applications (102.4 per cent), compared to Q1 2016.

“This suggests that, as we saw with personal loans towards the end of 2016, those seeking credit in the UAE may be having to work harder to secure it,” said Jonathan Rawling, CFO of compareit4me.com.

On average, residents applied for 3.25 cards each in the first quarter of 2017, compared to the average of 2.07 applications per user seen for the full year in 2016, the report claimed.

“Such an increase in the number of applications per user tells us that, rather than simply applying for the credit card they want, UAE residents are being forced to shop around for the credit card that they can actually get an approval for,” said Rawling.

One of the reasons making it harder for residents to get the card they apply for is the release of reports by the UAE’s Al Etihad Credit Bureau (AECB).

The AECB began issuing credit reports in 2014 providing details of credit cards, loans and other credit facilities, along with payment and bounced cheque history.

Last month, the AECB confirmed that it has been provided credit data from 59 financial institutions and telecommunication companies, while 64 iInstitutions have subscribed to its credit reporting services.

“The liquidity crunch caused by the low oil price has affected regional banks’ appetite for giving out credit,” said Rawling.

“Couple this with the widespread adoption of credit reports from Al Etihad Credit Bureau in the UAE, and you have an environment that sees only the most credit-worthy individuals approved for their first-choice financial products,” he added.

According to the report from compareit4me, the most applied-for credit card in the first quarter of 2017 was a relatively low-end product with no annual fee, and a minimum salary requirement of Dhs5,000 per month.

In comparison, the most applied-for card in Q1 2016 was a premium offering with a minimum salary requirement of Dhs20,000 per month.

In April, the AECB also began issuing credit scores to UAE citizens and residents.

“International best practice shows that a high credit score can give borrowers more negotiating power when applying for a loan or a credit card,” it said.

TOP 10 CREDIT CARDS IN THE UAE BY NUMBER OF APPLICATIONS IN Q1 2017

1) Citibank Citi Simplicity credit card
2) American Express Platinum credit card
3) Standard Chartered Visa Infinite credit card
4) Standard Chartered Titanium credit card
5) ADIB Cashback Visa Platinum credit card
6) NBF Islamic Infinite credit card
7) Citibank Citi Life Platinum credit card
8) Union National Bank Internet credit card
9) Noor Bank Best Rate credit card
10) DIB Johara Gold credit card