Credit cards have proved their worth over the past year as more people in the UAE have begun purchasing goods and services over the internet. This shift in consumer behaviour has led to a corresponding upsurge in digital payments as fewer people head to stores for groceries, medicines, and other necessities. Credit cards are among the easiest and convenient ways of making payments now in the UAE.
But aside from their practicality, for residents of the UAE credit cards come with a host of other benefits when used for online purchases. In many cases, paying with a credit card may even work to your advantage as compared to debit cards. Let’s take a look at some of these benefits, and how you can make the most of them with a few astute financial management strategies.
The best credit cards in the UAE today offer account holders the opportunity to earn points per dollar spend online and offline(in stores). Some cards will also rack up bonus points on categories such as groceries or food and beverage. These points are designed to work like cash, so you can redeem them for gifts, air tickets, restaurant vouchers – or even return a percentage of your spending in the form of cashback. When using cash or paying with a debit card you often don’t get any type of rewards, so keep that in mind if you want to collect points towards a goal.
Banks in the UAE often provide additional benefits for credit card holders. Buy-one-get-one-free movie tickets when booking in advance are common, and some banks even offer credit card holders deals on restaurant takeaway and delivery. These offers usually apply in addition to any rewards attached to card spending. For those with a large family, these deals can result in considerable savings.
Credit cards have become the default payment method for online shopping, not just because they are so easy to use, but also because they are among the safest financial instruments around. Since the card is not directly linked to your current or savings bank account, scammers who manage to obtain your card details, the money in your bank account won’t be touched. Nevertheless, it is important to remain alert to how and where your credit card details are shared to prevent misuse.
When you pay for online purchases with cash on delivery, it can be hard to remember where the money went. And although you are usually emailed a receipt for each individual purchase, you still need to account for everything manually to figure out if you’re sticking to your budget. On the other hand, when you make a purchase against a credit card online or offline (in stores), the transaction automatically shows up in your account almost immediately. This allows you to track your expenses on a periodic basis, so you have an overview of your financial situation.
Now that travel has begun to rebound, you’re probably thinking of booking hotel rooms or air tickets again. In most cases, you will need a credit card to secure a hotel room when making an online reservation – even here in the UAE. While debit cards may be accepted in some cases, this is usually not the norm, and hotels or smaller accommodation venues may ask you to pay an advance by bank transfer instead. But when travel is uncertain because of constantly changing regulations, getting a refund can be a tedious and cumbersome process. With a credit card, the process is often easier and smoother.
In the UAE, the Al Etihad Credit Bureau assesses your monetary dealings and creates a report or score that indicates how likely you are to fulfil your financial obligations. A good credit score makes it easier to get loans and even open bank accounts in the UAE.
One of the most important factors in your credit report is how well you manage your current financial obligations. You don’t need to have a credit card for a good credit score but using your credit card carefully and responsibly can have a positive impact on your credit-worthiness.
With the combination of safety, and rewards points, credit cards carry several benefits over debit cards for online shoppers in the UAE. Using credit cards can work in your favour.
This article is part of a series of features on spending responsibly while making the most of life in the UAE. Consider sharing it online with friends and family.
Credit cards can be a great way to teach teenagers about the importance of money. Although the very idea of putting a significant sum of money into an emotional young person’s hands may spark anxiety for some, teenagers can learn a lot about financial stability with a credit card.
What is Credit Card Debt Credit card debt is the outstanding amount of money you owe to the credit card company for making purchases, balance transfers, or cash advances on your account. It is a form of revolving debt that allows you to borrow up to a pre-specified credit limit continuously, provided that you pay the outstanding balance on time.
This article is intended to provide general information about finance and investments and does not replace or should be taken as professional financial advice. The content reflects the view of the author of the article and does not necessarily reflect the views of Citi or its employees, and we do not guarantee the accuracy or completeness of the information presented in the article except information on Citibank N.A. – UAE products referenced herein.
Everybody needs a credit card, but no single product suits everyone’s priorities. The best credit cards offer rewards that can help you achieve your individual goals. Looking to save on travel expenses or enjoy a free rewards upgrade on your next flight with Emirates? What’s the best Emirates Skywards Credit Card for you?
