Credit cards essentially allow users to spend money but delay actual payment until a later date, making them different from debit cards, where you are actually spending the money that you have in your account the moment you use them.
Banks in the United Arab Emirates give credit card users a credit limit, which can be used and then needs to be paid off, usually in monthly payments and sometimes with interest, depending on the bank in question.
Credit cards therefore act as short-term loans that need to be repaid every month.
A credit card can also continue to be used even in the event that the previous amount spent with it has not yet been repaid, though this will likely result in additional interest fees.
A credit card can be particularly useful in the UAE as there are a number of websites and stores that do not accept debit cards.
There are also a number of other benefits associated with getting a credit card, including rewards, security protection, the ability to not have to carry any cash on your person, automated billing and improving your credit score.
Many people decide that they want to get a credit card solely because of the rewards that come with having and using it.
These rewards usually come in the form of points that can get you cashback, gifts or discounts at certain places.
Reward points are added onto a credit card every time it is used, and the user may be able to save up to as much as 2% at the place they decide to redeem those points, depending on how many they have actually accumulated.
Credit cards are much more secure than debit cards – transactions that happen twice because of issues related to connectivity would be discussed almost immediately and resolved between the customer and the bank, and they also have superior encryption techniques that make sure that there is almost no chance of fraudulent activity.
All vendors in the UAE today have swiping machines installed at their retail outlets where credit cards can be used, meaning that there is no need to carry any actual physical money.
People also often favour a credit card over a debit card as they do not have to worry about their current account balance when using the former.
A credit card can be used to clear all bills, and this means that there is just the one bill that you need to worry about clearing at the end of every month.
Therefore, credit cards make life a lot easier by enabling the user to cut down on all the other bills that they would otherwise have to remember to pay every month.
Banks in the UAE make use of a credit score to judge the credibility of an individual to pay back a loan, and having a credit card that is regularly used and paid off every month is a great way to improve that score.