Historically, credit cards have always carried high interest rates. But in the UAE, the rates we pay are apparently among the highest in the world, averaging anywhere between 27 per cent and 36 per cent a year.
We pay more interest on our cards than many of our GCC neighbours; in Qatar and Kuwait, consumers pay about 18 per cent interest per year, while Saudis are charged up to 24 per cent.
Then again, there's also a good case as to why we should consider ourselves relatively lucky. Brazilians, for instance, are slugged up to 200 per cent a year on their credit cards, according to Reuters. Let's just pause for a moment to imagine those repayments.
"Consumers pay annual rates of up to 200 per cent for normal credit-card loans - the highest borrowing costs for that segment among the world's major economies," Reuters said last July in a story about the country's central bank tightening rules on credit-card loans backed by salaries and pensions.
The interest rates we pay on our credit cards are much higher than other types of credit - such as mortgages and car loans - simply because they carry more risk. It's not like a mortgage, for instance, that has a house as collateral. If you fall behind on your mortgage payments or stop paying them altogether, the bank knows that it can take your house away and sell it to get its money back. The same applies with your car, even though it does start losing its value the moment you drive it out of the showroom.
Credit cards are a different kettle of fish. Think about what you use your credit card for - anything from electronic gadgets to holidays to those spa visits. It's not like the bank can seize your new TV if you stop making your payments. The same goes for that fancy meal you splashed out on at Emirates Palace hotel, which you paid for with your credit card. The bank certainly can't repossess your dinner, nor can it reclaim the mani-pedi you splurged on. Credit cards are seen as higher risk, hence the higher charges.
Although it must be said here that credit-card interest rates are way too high in the UAE.
But the days of high interest rates could be coming to an end if a news report on January 31 in the Arabic-language Al Khaleej newspaper is anything to go by. Quoting an unnamed senior official at the UAE Central Bank, the newspaper said the banking regulator would announce this month an 18 per cent cap on credit cards. The aim, the official told Al Khaleej, was to curb bad loans.
So far, the banks have been quiet about the Central Bank's proposal. And who would blame them. After all, those high interest rates we pay for the privilege of using their credit cards plays a huge part in their profits. In fact, these days, it would be safe to say that it is a major driver of their bottom lines.
If the proposal is confirmed, you can bet that there will be a lot of creative number crunching going on in the back rooms of the banks. Does it mean we will say goodbye to free-for-life cards and start paying annual fees on all our cards? Will the loyalty points and other benefits that now seem to be a regular part of the 21st-century credit card come to an end?
More to the point, will the 18 per cent cap only apply to new cardholders? Hold on: does that explain why my bank rushed to replace my credit cards two months ahead of their expiry dates? Perhaps they know more than they are letting on. And here I was thinking it was just being super efficient.
But here's one idea I'd like to throw into the mix. I know consumers will love it, but I'm pretty certain the banks won't be embracing it in a hurry.
Let's come up with a quid pro quo arrangement with our banks. They slug us up to 36 per cent to use their credit cards and in return they give us up to 36 per cent on our deposits. It's only fair, right? We are using their money and they are using our money.
At the moment, my bank is offering 0.10 per cent on a basic savings account. Oddly, I've just checked the rate for my HSBC Advance savings account and there's a new note on the general information page for it that says: "Interest rate of 0.25% p.a on HSBC Advance Current account stands withdrawn effective 1st of April 2011."
Does that mean I'm not getting any interest on my money anymore? That quid pro quo idea is sounding more attractive by the minute. Although I can hear the echoes of laughter from the bankers all the way from here.
fglover@thenational.ae
Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
Thank You for Banking with Us
Director: Laila Abbas
Starring: Yasmine Al Massri, Clara Khoury, Kamel El Basha, Ashraf Barhoum
Rating: 4/5
Volvo ES90 Specs
Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)
Power: 333hp, 449hp, 680hp
Torque: 480Nm, 670Nm, 870Nm
On sale: Later in 2025 or early 2026, depending on region
Price: Exact regional pricing TBA
How green is the expo nursery?
Some 400,000 shrubs and 13,000 trees in the on-site nursery
An additional 450,000 shrubs and 4,000 trees to be delivered in the months leading up to the expo
Ghaf, date palm, acacia arabica, acacia tortilis, vitex or sage, techoma and the salvadora are just some heat tolerant native plants in the nursery
Approximately 340 species of shrubs and trees selected for diverse landscape
The nursery team works exclusively with organic fertilisers and pesticides
All shrubs and trees supplied by Dubai Municipality
Most sourced from farms, nurseries across the country
Plants and trees are re-potted when they arrive at nursery to give them room to grow
Some mature trees are in open areas or planted within the expo site
Green waste is recycled as compost
Treated sewage effluent supplied by Dubai Municipality is used to meet the majority of the nursery’s irrigation needs
Construction workforce peaked at 40,000 workers
About 65,000 people have signed up to volunteer
Main themes of expo is ‘Connecting Minds, Creating the Future’ and three subthemes of opportunity, mobility and sustainability.
Expo 2020 Dubai to open in October 2020 and run for six months
The%20specs
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NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
Guide to intelligent investing
Investing success often hinges on discipline and perspective. As markets fluctuate, remember these guiding principles:
- Stay invested: Time in the market, not timing the market, is critical to long-term gains.
- Rational thinking: Breathe and avoid emotional decision-making; let logic and planning guide your actions.
- Strategic patience: Understand why you’re investing and allow time for your strategies to unfold.
The specs
Engine: 2.0-litre 4-cylinder turbo
Power: 240hp at 5,500rpm
Torque: 390Nm at 3,000rpm
Transmission: eight-speed auto
Price: from Dh122,745
On sale: now
Sweet%20Tooth
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SERIE A FIXTURES
All times UAE ( 4 GMT)
Saturday
Roma v Udinese (5pm)
SPAL v Napoli (8pm)
Juventus v Torino (10.45pm)
Sunday
Sampdoria v AC Milan (2.30pm)
Inter Milan v Genoa (5pm)
Crotone v Benevento (5pm)
Verona v Lazio (5pm)
Cagliari v Chievo (5pm)
Sassuolo v Bologna (8pm)
Fiorentina v Atalanta (10.45pm)
Moon Music
Artist: Coldplay
Label: Parlophone/Atlantic
Number of tracks: 10
Rating: 3/5
Specs
Engine: Dual-motor all-wheel-drive electric
Range: Up to 610km
Power: 905hp
Torque: 985Nm
Price: From Dh439,000
Available: Now
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
The%20specs
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Read more about the coronavirus
A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
Why it pays to compare
A comparison of sending Dh20,000 from the UAE using two different routes at the same time - the first direct from a UAE bank to a bank in Germany, and the second from the same UAE bank via an online platform to Germany - found key differences in cost and speed. The transfers were both initiated on January 30.
Route 1: bank transfer
The UAE bank charged Dh152.25 for the Dh20,000 transfer. On top of that, their exchange rate margin added a difference of around Dh415, compared with the mid-market rate.
Total cost: Dh567.25 - around 2.9 per cent of the total amount
Total received: €4,670.30
Route 2: online platform
The UAE bank’s charge for sending Dh20,000 to a UK dirham-denominated account was Dh2.10. The exchange rate margin cost was Dh60, plus a Dh12 fee.
Total cost: Dh74.10, around 0.4 per cent of the transaction
Total received: €4,756
The UAE bank transfer was far quicker – around two to three working days, while the online platform took around four to five days, but was considerably cheaper. In the online platform transfer, the funds were also exposed to currency risk during the period it took for them to arrive.
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
More on Quran memorisation:
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%3Cp%3E%3Cstrong%3ECreators%3A%20%3C%2Fstrong%3EAri%20Katcher%2C%20Ryan%20Welch%2C%20Ramy%20Youssef%0D%3Cbr%3E%3Cstrong%3EStars%3A%20%3C%2Fstrong%3ERamy%20Youssef%2C%20Amr%20Waked%2C%20Mohammed%20Amer%0D%3Cbr%3E%3Cstrong%3ERating%3A%3C%2Fstrong%3E%204%2F5%3C%2Fp%3E%0A
Dengue%20fever%20symptoms
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The specs
Engine: Four electric motors, one at each wheel
Power: 579hp
Torque: 859Nm
Transmission: Single-speed automatic
Price: From Dh825,900
On sale: Now
