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28 March 2024

Personal finance: Credit card advice for new arrivals

Theda Muller

Published
By Theda Muller

Newbies – when you arrive here, not in debt but contemplating credit cards or loans, simply because they seem irresistible, take heed.

As expatriates coming from western countries where securing credit approval is under an extreme microscope, where the sytem is as old as the hills, where there is zero leverage, where you are very stringently rated and where if you want credit you need to give your 10 apples to secure 1 apple, take heed of the attractive credit facility offers that almost leave you salivating, in a state of unbelief, unable to succumb the temptation.

My advice is if you arrive here debt-free, keep it that way because you don’t need to buy stuff you don’t need with money you don’t have.

Unless you are disciplined, you really wish to invest in some form of asset that will yield a return on your investment (ROI), don’t do it, because you will get yourself into the spending habit and then there is no turning back. It’s very hard to get out of deep debt.

Keep your goal in focus, i.e. most of us come here to go abroad for a better life, to save money , repay our debts back home and elevate our financial stability for ourselves and the comfort of our loved ones, i.e. a brighter future. So let me share with you this is the only country in the world where there is ‘the power of money’, means you can earn good money, save it, build a comfortable life, acquire excellent assets and reaise your dream, but only if you are wise and take advice from those who made grave mistakes and did not respect these positive factors.

If you don’t have money for that special item you are dreaming about, then you just don’t have it. You must learn to save for it, rather than being tempted by ‘free this and free that’ because 9 times out of 10, you do not repay the full balance monthly on your  credit cards.  Maybe the 1st few payments yes, then the novelty wears off, then you apply for more credit and soon avoiding that inevitable interest by repaying the full dues, you just cannot make the cycle and here the problem starts setting in...

Going to sleep at night with not a care in the world that a creditor will be calling you at 8am for overdue payments, is the best feeling in the world, including being saturated with fear each time your phone rings because it will probably be a creditor where you don’t have the money, so you simply don’t have a fixed committment to make, so you don’t take the call. Not taking the calls means you could lose a prospective client opportunity whether employed or self-employed.

It happens to 90 per cent of people but you are in control, you always have been so if you can prevent the debt situation from day one, then do it, for you.

Debt is not a bad thing at all if you really know you can meet your commitments, otherwise don’t gamble with your life as it’s not worth the pain and torment you suffer in the end.
It ages you overnight to live in worry, stress, negativity, adversity and fear and at the end it robs you of a good life.

It could also rob you of your entire life, which means another 5 years extra to suffer pain and endure to repay your debt, or you may just take the easiest option, which is to shirk your responsibility and not take ownership.

The saying ‘you can run but you can’t hide’ is very true, you may be able to hide however your conscience will saturate your being even if you don’t have one, because it will dictate you spend the rest of your life looking over your shoulder as you never know.......

Don’t delude yourself that creditors will forget about you as economic situations and policies have changed, creditors do want their money repaid, they expect your good faith and if they don’t get it, they will initiate measures to recoup their money. Gone are the days you can just assume you can shirk your responsibilities and anyhow why burden yourself with such pain for the rest of your life? Who needs it?

When you have made the decision to apply for a credit facility then ensure it is for a tangible asset that will yield you dividends, something you can liquidate if ever you need finance in the future.

Applying for credit for a vacation is irresponsible if you cannot repay the debt, because if you cannot afford it, then you don’t need to impress anyone to spend the money you don’t have on the vacation. Stay at home, get a hobby, occupy yourself and learn to enjoy the small things in life that you are passionate about.

Even when planning to save money, plan a thrifty series of outings for yourself or family that is local, does not cost too much money, a small vacation you can afford that will foster happiness and fulfilment.

Spending loads of money you don’t have on trips can be shallow and hollow where you derive zero enjoyment and regret only sets in once you return home and admit it was a waste. Then you are faced with repaying that vacation.

Stop being impulsive when you see everything and simply grow urges to buy them with your plastic. When you use plastic, ensure you can repay your full outstanding balance on the due date, not one day later.

Maintaining a debt free life in the beginning with so many temptations can be a hard task but soon you would have conditioned yourself and the moment you see something you want, you will get a message to your brain that you don’t have the money ‘wait, you can buy it in 2 months or so’ and you will be comfortable with that assurance.

Trust me, I am speaking of experience because that very good habit soon just engrains itself into your being and you simply will not be able to just be a spend-thrift again.

If you are considering debt and you just started a new job, speak to colleagues, set to meet with your HR and ask them, ask friends, ask around and once you find all the advice you will see my advice is true.

There are many suffering in deep debt, with huge regrets, however it will take another 5years of their lives to see the sun of being debt free so it’s your choice to opt for credit if you don’t take advice.

You see, you create your own reality, not the creditors or the people who offered you the ‘unbelievable irresistable offers’, because at the end of the day, it was your decision, so nobody else is too blame but yourself, when you find yourself facing a debt crisis.

[Note 1:  Theda Muller is a UAE-based author of two books: Embrace Financial Freedom Volume One: 10 Proven Ways To Release Debt And Emotional Fears In Today’s Economy, and Volume Two: Releasing Fear And Bouncing Back From A Debt Crisis.
She also conducts webinars and workshops on debt recovery.
]

[Note 2: The views expressed are the author’s own and do not reflect in any way, the views of Emirates 24|7. Readers are advised to carry out their own due diligence before taking any decision.]

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