Over 60% of UAE residents unaware about credit card interest rates – survey

An estimated 5.9 million debit and credit cards are in circulation in the UAE.

Most credit card holders in the United Arab Emirates remain unaware about the interest rates charges on their cards, a new survey has found.

The poll by finance comparison website compareit4me.com found that 63 per cent of respondents did not know the interest rate attached to their credit card.

“Credit cards are big business in the UAE, with about 5.9 million debit and credit cards in circulation and spending on plastic rising year-on-year,” said chief executive officer of compareit4me Jon Richards.

“However, like any form of debt, credit cards need to be managed responsibly. To discover that nearly two thirds of credit card holders do not know the interest rate attached to them is alarming.”

He added: “If individual cardholders are unsure of the rates, contact the respective bank and request more information. Understanding the terms and conditions is vital to your financial health.”

The survey also found that 28 per cent were unaware about how missing a credit card payment would impact their chances of getting a loan in the future.

“With the launch of Al Etihad Credit Bureau, every aspect of your financial history is tracked and can be analysed by banks,” said Richards.

“Missing monthly payments or bouncing cheques are some of the things logged on your credit report and can affect your future ability to access finance such as a loan, another credit card or even a mortgage.

“I urge credit card users to swipe them responsibly – the alternative is excessive monthly payments that can quickly become unmanageable.”

The Al Etihad Credit Bureau launched in November 2014, following delays, with the first phase covering all residents and citizens’ credit history.

It is expected to help individuals track their debt levels while also enabling banks and financial institutions to assess risk accurately by tracking customers’ history.