How is interest worked out on your credit card?

You pay interest on a UAE credit card only when you leave part of the statement balance unpaid after the due date, or when you take cash. The rate is set monthly.

When does your card charge no interest?

When you pay the full statement balance by the payment due date. Central Bank standards say banks must not charge interest on the outstanding balance, excluding cash advances, when the new balance on the statement is paid in full by the due date.¹ The Central Bank’s 2011 guidance on cards says the same and allows interest on cash from the transaction date until it is repaid.²

What rate will you pay?

The figures are from each bank’s own document.^345678910 The annual rate is the monthly rate times 12. Mashreq says the purchase rate on your card can vary and shows the actual rate on your statement.⁸

How is the interest worked out?

Day by day. Emirates NBD’s key facts statement works its example this way: a AED 2,000 purchase, a AED 100 minimum payment, then interest of AED 71.45 on the remaining AED 1,900 for the 31 days from 7 January to 6 February at 44.28% a year.⁵ That is AED 1,900 × 44.28% ÷ 365 × 31.

Banks’ documents also say interest runs on each new purchase from its transaction date while you carry a balance. Emirates NBD charges interest on all new transactions from their transaction dates if you do not pay the total due for two cycles.⁵ ADCB charges on the daily closing balance from the transaction date to the repayment date.³ FAB charges on every transaction from its transaction date to the statement date, and on the carried balance from the statement date.⁶

Does the rate go up if you pay late?

At several banks, yes. Emirates NBD adds 0.5% a month if your account is past due at least twice in six months.¹¹ FAB adds 1% while the account is past due.⁶ RAKBANK adds 0.5% if the account was past due in the previous statement.⁹ HSBC’s tariff says its rates increase by 12%, or 6% on its Black, Private Bank and Premier Mastercard cards, while you are overdue.⁷

Can the bank charge interest on interest?

No. Federal Decree-Law No. 6 of 2025, the Central Bank law in force since 16 September 2025, bars banks from charging interest on accrued interest on facilities to customers.¹² The Consumer Protection Standards also require banks to tell you they are not permitted to charge interest on accrued interest on any credit product.¹ Mashreq’s key facts statement says no interest is charged on outstanding interest on your card.⁸

Interest is not subject to VAT. Commercial Bank of Dubai’s schedule says so directly, while fees include 5% VAT.⁴

Work out what your own balance costs with the interest calculator.