Credit cards offer quick solutions when money runs tight. People swipe their cards, buy what they need, and plan to pay later. But this convenience hides a trap called revolving credit that pulls thousands of UAE residents into debt cycles they never expected. These numbers keep climbing because many don’t understand how credit cards actually work.
How Does the Credit Card Trap Work?
Banks require a minimum payment each month. Most cardholders believe paying this small amount keeps them safe from trouble. This thinking causes serious financial damage.
When someone pays just the minimum, the remaining balance moves to the next month. Banks then charge interest on whatever remains unpaid. Monthly interest rates in the UAE range between 2.5% and 3.5%, which adds up extremely fast.
Here’s a real example: Someone owes 5,000 dirhams and pays only the 250 dirham minimum. The bank charges interest on the remaining 4,750 dirhams. Next month, the total owed grows larger because interest keeps piling up.
Why UAE Residents Fall Into This Trap
Living in Dubai, Abu Dhabi, and other emirates costs a lot of money. Rent alone takes half of most salaries. Then families must pay for groceries, school fees, car payments, and utilities. Many people max out their credit card debt just covering basic monthly expenses.
Problems multiply when unexpected costs appear. Medical emergencies, car breakdowns, or urgent family travel force people to use their cards even more. They promise themselves to pay everything back quickly, but high interest makes this goal impossible to reach.
Credit Scores and Long-Term Damage
The Al Etihad Credit Bureau (AECB) monitors how everyone uses credit across the UAE. Late payments, maxed-out cards, and high credit usage all damage credit scores. This three-digit number controls access to loans, mortgages, and even new credit cards.
Failed payments stay on credit reports for up to five years. During this long period, banks view these people as risky borrowers. They either reject loan applications completely or charge much higher interest rates on approved loans.
Bad credit creates a vicious cycle. People with damaged scores can only access expensive credit, which makes escaping debt even harder. Good credit habits take years to rebuild once damaged.
Breaking Free From the Credit Card Trap
Getting out requires clear action and strong discipline. Small changes make huge differences over time.
Stop using the card immediately. Put it away in a drawer or a safe place. Clearing debt becomes impossible while adding new charges every month. This first step feels hard but matters most.
Pay more than the minimum. Even adding 100 or 200 extra dirhams monthly makes a significant impact. Extra payments reduce the principal balance directly instead of just covering interest charges.
Focus on one card first. People with multiple cards should pay minimums on all except one. Put every extra dirham toward the card with the highest interest rate. Clear that one completely before moving to the next.
Consider debt consolidation. Some find relief by combining multiple high-interest debts into one lower-interest loan. This simplifies payments and reduces total interest charges. Research options carefully before committing.
Professional help exists for those feeling overwhelmed. Financial advisors and credit counseling services create personalized repayment plans based on individual situations. They offer practical strategies for managing money more effectively going forward.
The Bottom Line
Revolving credit appears like financial freedom until interest charges create endless debt cycles. Understanding how UAE credit cards actually operate protects people from making expensive mistakes that take years to fix.
