My credit card debts are out of control and I do not see a way out. I have lived in the UAE for almost two years and earn Dh8,000 in the accounting and finance industry. I borrowed the money when my wife gave birth to our son back home in Cameroon. This along with other responsibilities made me unable to keep up with my credit card payments.
I was managing OK until January this year when additional charges were applied, such as cash withdrawal charges, took the balance over the limit. My debts are:
Card 1: Dh35,172 (the limit is Dh32,000)
Card 2: Dh12,385 (the limit is Dh15,000)
Card 3: Dh23,713 (the limit is Dh20,000)
In addition I have other personal debts as below:
Company loan: Dh2,666
Other personal debts:Dh10,000
Total: Dh83,936
In recent months I have managed to make the minimum monthly payments, though this has not been enough to reduce my debt below the limit. I am now overdue by a month on each card. I have made countless attempts to secure a loan to close the credit cards and focus on one fixed monthly loan repayment. However, due to my low rating with the Al Etihad Credit Bureau, I have not been successful. One of the banks has sent me several notifications and threatened to blacklist my account and take action against me. This could further jeopardise my situation and possibly land me a jail term. My monthly expenses, including bills and remittances, average about Dh3,500. I have been trying to research ways to relieve my debt. Would a debt consolidation plan work for me? DB, Dubai
Debt panellist 1: Ambareen Musa, founder and chief executive of Souqalmal.com
Let's focus on the root of your debt problem and discuss how your credit card usage is making you sink deeper into debt. First of all, you've been putting the bare minimum towards your monthly credit card repayments. With annual interest rates hovering close to 40 per cent, this makes it very difficult for you to get rid of the debt.
As of now, you're already behind on your bare minimum monthly payments. Considering the credit card late payment fee ranges between Dh200 Dh300 across most banks in the UAE, you're only going to end up expanding your outstanding balance if you delay any more payments. You've also exceeded the credit limit on two of your credit cards, which makes you liable to pay the over-limit fee as well. This fee is around Dh200 to Dh300 at most banks too.
You mention that your credit card providers have also levied a cash withdrawal fee. A cash advance fee at most banks is about 3 per cent (or higher) on the amount withdrawn. Additionally, what makes cash withdrawal on your credit card even more unfavourable is that there is no interest-free period on such transactions. This means interest will start accruing right from the date you withdraw the cash, and the applicable rate could even be higher than the standard interest rate on your card.
These hefty penalties coupled with a high interest rate are only going to make repayment more challenging for you.
So what's the way out? You could approach your card providers, explain that you're unable to keep up with your repayments, and request them to restructure your outstanding debt into a fixed-interest fixed-tenure loan. This will help contain the damage caused by hefty interest payments.
You could also look for a credit card with a balance transfer facility, preferably one that offers you a zero per cent interest rate on the amount transferred. But since these offers are valid for an introductory period of say three to six months, you must try to repay all or the majority of your outstanding balance during this interest-free period to actually take advantage of the offer.
Your current financial situation also calls for extreme budgeting. Review your expenses and try to cut back wherever you can. Every dirham saved counts. Since you've exhausted all conventional debt options, consider using your savings to repay some of your most expensive credit card debt.
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Debt panellist 2: Shaker Zainal, head of retail banking at CBI
You are correct in your approach to resolve your short-term financial distress, it would be recommended to consolidate your existing debts into a longer tenure, lower interest personal loan. Credit card interest rates tend to be higher and there are also excess limit usage charges applicable for cards.
Your best option is to approach the bank, where your salary is paid to, and apply for a personal loan. It is important to arrange a tenure long enough to reduce your monthly instalments to a serviceable level. You should explain to the bank that until your expenses were increased by the birth of your baby, you had been a borrower with a good track record and provide them with your relevant account statements to validate this.
You have mentioned that previous attempts to apply for a loan have been unsuccessful, so you might wish to offer the bank your end of service benefit as collateral. This would increase the likelihood of your loan application being approved. Since your end of service benefit will be credited to the same bank, where your salary is being paid to, it makes sense to make your loan application to them.
Another option is to ask for a top-up company loan or advance salary payment from your employer, as your outstanding loan amount of Dh2,666 is relatively low, compared to your Dh8,000 salary. If you manage to get additional financing from your employer, you must prioritise payments to card 1 and card 3, as you are currently incurring excess limit charges on them.
Selling assets back home or in the UAE is always another option you should consider, to help reduce your financial distress and get your finances back under control.
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Read more:
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Bank customers must submit their Emirates ID or face suspension
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Debt panellist 3: Steve Cronin, founder of DeadSimpleSaving.com, which helps residents invest their own money
You have been trying to fix your situation and you need to keep trying – every month that goes past will add interest to your debt. Credit cards have a very high interest rate, so you need to pay down the balance as fast as possible. For example, an interest rate of 3 per cent per month is equivalent to just under 43 per cent per year.
A debt consolidation plan is very important for you to get out of this situation. Your salary of Dh8,000 is just on the borderline for what is accepted but your low credit bureau rating due to missing card payments will count against you.
Talk to all your banks proactively and seek out the most senior and relevant person to talk to. Show them you have a clear intention and plan for paying off your debt. If your salary bank won’t give you a consolidation loan, maybe another bank will if you transfer your salary to them.
Talk to your company about the possibility of extra work, getting a raise at the end of the year or taking out a further advance on your salary to help pay down some of the debt. Consider also looking for another job that pays more money, especially a company that has a good relationship with the banks. See if you can help small businesses or individuals with their finances during evenings and weekends, in order to make more money.
Sell unnecessary assets if you have any and see if any friends or family can lend you some money at a lower interest rate. You may be able to reduce your monthly expenses and save more if you reassess your rent, transport and food.
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
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
The smuggler
Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.
Khouli conviction
Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.
For sale
A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.
- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico
- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000
- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950
Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
'HIJRAH%3A%20IN%20THE%20FOOTSTEPS%20OF%20THE%20PROPHET'
%3Cp%3E%3Cstrong%3EEdited%20by%3A%3C%2Fstrong%3E%20Idries%20Trevathan%3Cbr%3E%3Cstrong%3EPages%3A%3C%2Fstrong%3E%20240%3Cbr%3E%3Cstrong%3EPublisher%3A%3C%2Fstrong%3E%20Hirmer%20Publishers%3Cbr%3E%3Cstrong%3EAvailable%3A%3C%2Fstrong%3E%20Now%3C%2Fp%3E%0A
A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
FROM%20THE%20ASHES
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Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
match info
Chelsea 2
Willian (13'), Ross Barkley (64')
Liverpool 0
