Equality through Financial Inclusion Knowing your credit card details

cc-educational-1250x560

Today, the credit card is the most common form of payment either online or in-store. While credit cards offer convenience and financial flexibility, they also come with fees and charges that you should be aware of in order to manage your finances effectively. Understanding the general details is also essential for responsible usage, maximises the benefits of your credit card, and maintains your financial health.


Schedule of Fees

The Schedule of Fees includes all fees and charges including details of any applicable third-party fees. Most credit card providers have this schedule available on their website.


Annual Membership Fee or Renewal Fee

This is the yearly fee payable upfront or upon renewal of membership.


Finance Charge

Interest charged on your retail purchases, cash advance, and any installment plans such as Balance Transfer, Credit Card Loan, etc. The applicable finance charge is normally communicated through the Schedule of Fees of your credit card provider.

In general, finance charge is levied if you:

  • Paid an amount less than the total amount due by the payment due date;
  • Have taken a cash advance;
  • Have taken an interest-bearing installment plan / Balance Transfer / Credit Card Loan on your credit card;
  • Have not settled all the unpaid credit card transactions including the applicable finance charge.

Over Limit Fee

Over limit fee is charged if at any time or during the billing cycle, the current balance in the credit card exceeds the assigned credit limit. The fee will be payable immediately.


Late Payment Fee

Late payment fee will be charged if the minimum payment due is not paid by the payment due date.


Foreign Currency Transaction Margin

Foreign currency transaction margin is levied on the non-AED transactions at the wholesale foreign exchange market rate (including any processing fee) that is selected and applied by the Card Scheme Provider on the date of conversion.


Foreign Transaction Fee

All foreign transactions (AED currency) will be subject to a processing fee stated in the Schedule of Fees of your credit card provider.


Payment Due Date from Statement of Account Date

Payments are generally due within 25 days.


Interest Free Period

This is between 25 to 55 days from the credit card transaction date (subject to payment in full of the total amount due by the payment due date) with an exception if the previous month’s balance had not been cleared in full, or if cash advance or any other product has been availed that is excluded from the interest free period.


Minimum Payment Due

Minimum amount that needs to be settled. In general, it is 5% or AED 100 whichever is higher:

  • 5% includes the sum of the full amounts owed to your credit card provider for the Annual Membership Fee, any monthly installment amounts, any Over Limit Amount, any Over Limit Fee and 5% of the principal balance; or
  • AED 100; or
  • If the Total Outstanding is less than AED 100, it must be paid in full.

Important Note

If you have been making minimum payments, you will likely pay more in interest and it will take longer to pay off the total outstanding.

Understanding the general details and common fees associated with a credit card is crucial for responsible financial management. By being aware of factors such as finance charge, and repayment terms, as well as fees like annual charges, late payment penalties, and foreign transaction costs, you can make more informed decisions and avoid unnecessary expenses.

Proper knowledge of these aspects allows you to maximise the benefits of your credit card while minimising financial risks. Ultimately, staying informed and using your credit card wisely can help you maintain a good credit score, avoid debt, and enjoy the convenience and rewards that credit cards offer.

Looking for the right credit card? Click here to learn more.

Tags: Improving credit Working and growing Rebuilding finances Financial protection