^{Money Guide for Expatriates in the UAE} All you need to know about credit card interest

Knowing about credit card interest is crucial, especially for newcomers in the UAE who may be unfamiliar with how credit works. Here is a helpful guide that explains the basics of credit card interest and may help you avoid more debt.

What is credit card interest?

Credit card interest is the cost of using the assigned credit limit. When the limit is used for purchases and the total outstanding is not settled in full at the end of a billing cycle, interest will be charged.

Factors affecting interest rates

• Credit score: A higher credit score may help you secure lower rates
• Type of transaction: Cash advances often attract higher interest rates
• Promotional rates: Some cards offer low or 0% interest rates initially

How to avoid paying interest?

• Always pay off the full complete balance on time
• Most cards offer a grace period of around 20 to 25 days with no interest
• Make large purchases when you can pay them off quickly to avoid extra charges

Example:

With a 2.5% monthly rate, carrying AED 1,000 for a month means around AED 25 in interest.

Understanding monthly interest rates in the UAE can save you money and worry. Consider clearing your balance monthly, keep an eye the monthly interest rate on your card and use credit responsibly to avoid debt.