When I left Dubai in 2019, I did not pay off my credit card. I am now in my home country and because of the Covid-19 pandemic, I lost my job and do not have a stable income.
Since I left three years ago, I have not been able to make any payments towards my UAE credit card, which had a limit of Dh1,000 ($272).
However, the total amount owed has now reached about Dh45,000 ($12,253), which I cannot afford to pay.
I have tried emailing the bank as I am planning to return to Dubai to work, but I am worried that I will have an issue at the airport over the credit card debt. I don’t know if the bank has reported the case to police.
Can you advise me on what to do? LC, Philippines
Debt panellist 1: Steve Cronin, founder of DeadSimpleSaving.com
It is scary to see how a credit card with a Dh1,000 limit can generate a debt of Dh45,000 in only a few years.
There are thousands of people in the same situation as you — so much so that one of my top recommendations is for you to read the previous Debt Panel articles on The National’s website.
You are right to worry about turning up in Dubai unannounced, as the bank may have filed a case against you. At Dh45,000 it is unlikely to be a criminal case, but a civil case may cause problems with obtaining your work visa and starting a new job.
Emailing banks seems futile — you need to call them. Tell them you are planning to return to Dubai and what your salary will be, if you know it.
Ask for a payment plan or conversion to a personal loan, so you can start making payments either before you arrive or when you start earning. Also, try to find out if the bank has filed a case against you.
The bank may not be very co-operative. You may need to call several times until you find someone helpful, or you may have to insist on talking to a manager who can make decisions.
The bank might accept only repayment in full, even if it is impossible for you to do that. Contacting the bank may lead to them filing a case against you, if they haven’t already.
Alternatively, you may turn up in Dubai and nothing happens. If you have renewed your passport, your prior history of debt may no longer be linked to you. But this is a big risk to take.
You may want to discuss your situation with the HR department of your new company, but you should try to talk to your bank first to understand what their position is.
If the bank is being difficult and insisting on full payment before they drop their case, you may need to seek work elsewhere in the region to first raise money and pay off your debt before coming back to Dubai.
Debt panellist 2: R Sivaram, executive vice president and head of retail banking products at Emirates NBD
Before leaving the UAE in 2019, you should ideally have contacted your bank and explained your circumstances.
While you have not indicated how much you spent on your card, it is concerning to note that against a limit of Dh1,000, you now have a balance of Dh45,000.
Failing to repay the amount owed to the bank is a breach of the credit card agreement and a bank is expected to take action if payments are missed for so many months and there is no communication from you.
founder of Conscious Finance Coaching
I suggest you first contact the bank and explain your current situation, as well as your intention to return to the UAE.
I am not sure of your current financial situation, but since you plan to return to the UAE and if you have found a job, then check if you can work out a payment plan with your bank.
You need to demonstrate that you are willing to clear your debt and start making regular payments for the bank to be more amenable.
Since there has been no communication with the bank and no payments as well, there might be an outstanding police case and it could have been registered with immigration.
This means you may not be able to enter the UAE. But again, the bank will know if there is a police case.
A bank could be willing to enter into a discussion and it might be possible to have some of the interest and charges waived.
To do this, however, a bank will probably ask for a lump-sum payment before it agrees to reduce the interest and set up a repayment plan that you can afford to make consistently.
Either way, I would recommend that you contact your bank to ask what is possible. Ensure that everything you agree to is confirmed in writing.
Once you reach an agreement, the police case can be lifted, assuming there is one, and any immigration ban with it. But make sure you have confirmation from the bank before you travel.
Alternatively, you could tap into your savings and investments or ask family members to help you out with an interest-free loan to settle your credit card debt.
Debt panellist 3: Carol Glynn, founder of Conscious Finance Coaching
The increase in your outstanding balance owed is, unfortunately, a common situation with credit cards.
People often don’t understand the financial impact of not paying credit card debt. It also happens with unused cards as most have annual fees that generate charges, then interest and penalties on the unpaid annual fees.
As you are experiencing, the compounding effect of unpaid balances plus annual fees, interest, late payment fines and penalties results in the amount due growing very quickly.
Keep communicating with the bank. Keep a record of all your email correspondence to date and going forward.
It is important to also call the bank and request information regarding your debt. When you come to the UAE, visit the branch in person as this is usually the most effective way forward.
Discuss repayment options with your bank. Ensure you read and understand all terms and conditions of any repayment option the bank suggests. If you are not clear, ask an independent person you trust to help you understand the offer.
It is unlikely the bank has raised a police case against you for a balance of this size but during your discussions, ask them to confirm if they have taken this action. You can also call the police and ask if there are any open cases against you.
The Dubai Police website also offers a free service to check if you have a travel ban against your name.
If you cannot afford to repay the debt, one option would be to take out a personal loan and use the funds to pay off the credit card in full.
A loan will carry a much smaller interest rate than your credit card. I would recommend that you immediately cancel the credit card and ensure you obtain a clearance letter from the bank confirming that it is closed and your debt cleared. Keep this letter in a safe place in case you need it in the years to come.
If you are concerned about the monthly repayments on the loan, you can extend the tenure to reduce the instalments to an amount you can afford to pay.
It is also wise to manage your expenditure and budget to ensure you can allocate enough to pay your monthly instalments each month.
It is best to pay the credit card balance as soon as possible. If a personal loan is not an option, could you borrow from a family member or friend and then repay them in instalments from your salary?
The Debt Panel is a weekly column to help readers tackle their debts more effectively. If you have a question for the panel, write to pf@thenational.ae
