How to pay down credit card debt in the UAE

Card interest runs at 3.69% a month on most Emirates NBD cards, 44.28% a year.¹ Paying more than the minimum and adding nothing new both cut the interest you pay. If you cannot keep up, the bank has duties to help you.

Step 1. See what the minimum really costs

Emirates NBD’s key facts statement shows an AED 2,000 balance at 44.28% a year, paid off with the minimum of 5% or AED 100, taking 36 months and about AED 1,500 in interest.¹ Your own statement must show the same calculation for your balance, with a warning that paying only the minimum costs more and takes longer.²

Paying a fixed amount above the minimum shortens this sharply. Worked month by month at 3.69%, with no new spending, an AED 10,000 balance takes 37 months and about AED 8,482 in interest at AED 500 a month, 27 months and about AED 5,808 at AED 600, and 13 months and about AED 2,711 at AED 1,000. That is arithmetic on the published rate; your bank counts interest by the day.

Put your balance and rate into the minimum payment calculator, then try a fixed higher payment in the interest calculator.

Step 2. Stop new spending on the card

While you carry a balance, new purchases are charged interest too. Emirates NBD charges interest on all new transactions from their transaction dates if you do not pay the total due for two cycles.¹ Late payments also raise the rate at some banks: Emirates NBD adds 0.5% a month if your account is past due twice in six months.³

Step 3. Pay the highest rate first

If you have more than one card, the card with the highest monthly rate costs you the most per dirham. Pay the minimum on every card to avoid late fees, then put anything extra on the highest-rate card.

Step 4. Compare a fixed plan

A balance transfer or instalment plan moves the debt onto fixed monthly payments at a set rate. Emirates NBD publishes plan rates of 0.53% to 3.46% a month on a reducing basis, against 3.69% on most of its cards.³ HSBC publishes 0% to 29.88% a year, reducing, with no early settlement fee.⁴ Ask for the exact offer, including the processing fee and early closure fee, and compare it in the balance transfer calculator. See balance transfers and instalment plans.

Step 5. Talk to the bank before you miss a payment

Central Bank standards require banks to offer qualified credit counselling, to encourage you to talk openly about your finances, and to give reasonable consideration to alternative arrangements when you approach them.² If you agree a revised repayment plan, the bank must confirm it in writing within 10 business days with a new schedule showing how payments are split between interest and balance. If it rejects your offer, it must tell you why in writing.²

The bank must also tell you that arrears are reported to the credit bureau.² Your payment history and late payments are factors in your credit score.⁵

Step 6. Know the last resort

If you cannot pay your debts at all, Federal Decree-Law No. 19 of 2019 on Insolvency covers individuals. A court appoints one or more experts who work with you and your creditors on a plan to settle your debts within three years, and the law protects the debtor from legal prosecution.⁶

Write down every card’s balance and rate today, set a fixed monthly payment above the minimum, and call your bank before any payment is missed.

The small print

• Credit counselling and revised arrangements are Consumer Protection Standards clauses 5.2.4.1 to 5.2.4.5. The minimum payment disclosure is clause 2.1.3.20.²
• Paying the highest-rate card first is arithmetic: interest is charged as a percentage of each balance, so the same extra dirham removes more interest on the higher rate.