🧠 9 Smart moves if you have a UAE credit card

Credit cards are often painted as financial traps, and in the wrong hands, they can be. But when used with discipline, they’re one of the few types of debt that can actually work in your favour.

In the UAE, credit cards can come with cashback, travel perks and protection for your purchases. But they also come with some of the highest interest rates in the world and hidden fees that most people miss. Read on to learn:

• The 9 smart moves that make better of your credit card

• How to avoid costly mistakes

• In the news: UAE stablecoin launch. No, it's not a Bitcoin...

Smart moves vs. costly mistakes

We’ve structured this guide as a comparison between what savvy cardholders tend to do — and where many others go wrong in the UAE.

1. Always pay in full

Costly mistake: Letting your balance roll over

Credit card interest rates in the UAE can exceed 35–40% per year. If you don’t pay your full statement balance, interest is charged on the remaining amount. While you won’t pay interest on what you’ve already cleared, the unpaid balance can quickly become expensive — and if you miss payments altogether, interest compounds fast.

2. Use different cards for different purposes

Costly mistake: Relying on a single card for everything

No single credit card offers the best deal across every category. Some cards are strong on cashback, others on travel points, and some offer lower foreign exchange fees. Having a mix of two to three cards, each tailored to a different type of spending, is often the most efficient setup.

3. Use supplementary cards to maximise rewards

Costly mistake: Missing out on cashback and points from family spending

Most banks in the UAE offer one or two free supplementary cards. These allow your partner or a family member to spend on the same account — helping you earn more cashback or points across your combined purchases. Make sure that all supplementary card holders are responsible with money as you are solely liable for all spend (you can also set limits on supplementary cards).

4. Keep credit usage within 30–40% of your total limit

Costly mistake: Regularly maxing out your cards

Credit utilisation — the percentage of your available credit that you’re using — is a key factor in your credit score. Using less than half of your total credit limit signals responsible borrowing. Going above that from time to time isn’t a problem, but consistent overuse could be. For more information on factors that impact your credit score, check out our most recent article.

5. Set transaction limits via your bank

Costly mistake: Leaving your card fully open

Most banks in the UAE allow you to set daily or per-transaction limits. These can be increased or reduced easily, but having them in place by default can limit your exposure in the event of card fraud or theft.

6. Reassess annual fees each year

Costly mistake: Forgetting to review your card’s value

Some cards offer generous rewards or benefits — but at a cost. Annual fees are often waived in the first year, but renew automatically. Make a habit of reviewing your cards before renewal. If the benefits no longer justify the cost, switch to a better option.

7. Understand the real cost of overseas spending

Costly mistake: Ignoring the full FX markup

Spending in foreign currency involves two layers of charges: a fee from the card network (Visa or Mastercard, typically around 1.15%) and a fee from your bank (usually 2–3.5%). Some cards waive the bank fee, which can make a significant difference if you travel often or shop internationally. Need more information on how card fees on overseas spending works, take a few minutes to read our most recent article.

8. Only use your card as a payment method

Costly mistake: Using it to access cash

Withdrawing cash using your credit card counts as a “cash advance” — this comes with a transaction fee (often 3%, or at least AED 100) and interest that starts accruing immediately. This should be avoided unless absolutely necessary.

9. Keep your OTP private

Costly mistake: Sharing security details with a third party

Your One-Time Password (OTP) is the final authorisation step for any transaction. No one — not your bank, the police or a delivery company — should ever ask for it. Sharing it gives full access to your account and can result in irreversible fraud.

Use it, don’t get used

Used responsibly, credit cards can offer a safer, more rewarding way to pay — with additional protection on purchases and access to exclusive benefits. But that only works if you treat your card as a tool, not as a loan.

Pay in full, keep your usage in check, and be alert to the terms and fees. The moment you stop paying attention is usually when the costs begin.

IN THE NEWS:

You may have heard that FAB (First Abu Dhabi Bank) announced its plans to launch the UAE's first stablecoin fully regulated by the UAE Central Bank. In the era of bitcoin and crypto hype, you may be forgiven for thinking this is just another version.

But stablecoins are different. They operate more like a digital currency, having the same value as the Dirham but operating on the blockchain. If you're new to this topic, this article from The National does a good job at explaining what you can expect from AE coin.

Disclaimer: Please bear in mind that this email does not constitute financial advice. Any choices you make you are solely responsible for. We always aim to provide highest quality, independent views but do your own research to ensure you’re comfortable with any changes you make to your personal finances.