I have been meaning to write something about the advantages of using credit cards for sometime now but had pushed it off until today when I saw Gulf News in Focus articles about credit cards.
Back then I was surprised at how easy it was to apply for a credit card here in the UAE– granted it was company provided still there was no need to wait until we finished that six months probationary period, most of my colleagues even signed the application just a few days after our orientation and was swiping away even before we got that confirmation letter
Even now with the stricter rules and criteria for eligibility, local banks ask for minimal requirements, specially if one is from a pre approved company i.e. government offices and big reputable companies.
Now people might argue – and I know a lot of them will, that credit cards are evil. People would argue that it is because of credit cards that they are in debt and I beg to disagree, they are in debt because they abused the use of credit cards and lived outside their means.
Credit cards are not to be treated as an unlimited supply of shopping funds but as something to help you get by until your salary comes.
I am no financial expert but the way I see it, if you use credits cards wisely, you get to enjoy the perks and might even ‘earn’ more shopping money.
Here are some useful tips on how to get more from your credit cards:
- Never be blinded by a high credit limit, free movie passes etc, this seemingly ‘free’ perks aren’t really free because you pay for it with your annual fee. Annual or membership fees can cost anywhere from 1000-2500 AED. It is better to choose a ‘free for life’ credit card. If you do the math, even if you watch a movie once a month, it still won’t cost you more than the lowest annual fee and that is with popcorn and soda too.
- Choose cards that offer cash back schemes or redeemable point system schemes
- Never spend beyond your credit limit because over limit fees can be from 300-500 AED
- Always pay in full to avoid late payment fees and interest charges
- If you can not pay in full, at least pay the minimum amount required
- Keep tract of your spending (most banks have sms alerts in any case) and keep in mind your due date so that even if you do not get your statement you more or less know how much and when you have to pay
- know how to control your spending, like I said credit cards are not free flowing invisible money but a tool to help you get by
I have just redeemed the points I have earned and I got 500 AED worth of shopping vouchers. It’s guilt free spending money and thus I was able to splurge and bough my self a ton of stuff!!!