Finding the right credit card can feel overwhelming, especially when you want to protect your financial health. Many UAE residents worry about damaging their credit scores when applying for new cards. The good news? With careful research and smart strategies, you can select a credit card that won’t hurt your credit score and might even improve it.
Understanding the Relationship Between Credit Cards and Credit Scores
Your credit score serves as a financial report card that lenders examine before approving loans or new credit cards. Each application for a credit card generates a hard inquiry on your credit report, which temporarily lowers your score by a few points.
Making smart choices about when and how you apply for cards helps minimize this impact.
Factors to Consider When Selecting a Card
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Pre-qualification Options
Many UAE banks now offer pre-qualification tools showing which credit cards you will likely be approved for before submitting a formal application. This process uses a soft inquiry that won’t affect your credit score.
Banks like Emirates NBD, ADCB, and others provide these tools online.
When you find a pre-qualified offer, you reduce the risk of rejection and avoid unnecessary hard inquiries.
This approach is particularly valuable for people working to build or repair their credit history.
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Annual Fees and Interest Rates
Cards with lower annual fees may seem attractive, but sometimes higher-fee cards offer benefits that outweigh the cost. Compare the total value proposition rather than focusing solely on fees.
Interest rates become important if you carry a balance. While the goal should always be paying in full each month, life happens.
A card with a reasonable APR provides a safety net when needed.
Cards Designed for Credit Building
Some financial institutions offer specialized products designed as credit cards that help build credit. These cards typically feature:
- Lower qualification requirements
- Regular reporting to Al Etihad Credit Bureau
- Manageable credit limits
- Educational resources about credit management
Secured credit cards represent a good starting point for many. These cards require a security deposit that typically equals your credit limit, minimizing the bank’s risk while allowing you to demonstrate responsible credit use.
Smart Application Strategies
Timing matters when applying for new credit. Space out applications by at least six months to minimize the impact on your score.
Each application causes a small temporary dip, but multiple applications in a short timeframe signal potential financial distress to lenders.
When shopping for specialized financing like auto loans or mortgages, submit all applications within a two-week window.
Credit scoring models typically count these as a single inquiry when they occur close together.
The Benefits of Long-Term Relationships
Once you find a credit card that works for you, maintain the account even if you don’t use it frequently.
The length of your credit history influences your score, so older accounts benefit your profile.
Many UAE banks reward customer loyalty with improved terms, higher limits, and additional perks over time.
Building a relationship with your financial institution often leads to better opportunities as your credit profile strengthens.