The Central Bank has told the country’s 51 banks to explain the proper use of credit cards to applicants before approving their request for a card, saying this would allow both parties to avert problems.
An unnamed Central Bank official, quoted by 'Emarat Al Youm' Arabic language daily, said banks should also publish detailed information on credit cards on their websites since applicants have no time to read all the information when they are at the bank to sign the application.
The paper said the official was reacting to complaints by credit card holders that banks are misleading applicants just to market their products.
“Banks are bound to clarify the contents of their handbook on credit cards and publish them in detail on their website…they must not delay this until after applicants receive their card since this will be meaningless after the client signs the application,” the official said.
“We also ask clients to request the handbook from the bank and read it well before signing any application…clients must not be satisfied with some brief conditions presented by bank employees to them.”
The official said banks do not have a unified credit card handbook but added that there are “general rules and practices as well as fixed principles” which must be included in these handbooks such as the interest rate, repayment periods, instalments and other issues.
'Emarat Al Youm' also quoted Master Card chief in the UAE, Ayad Al Kurdi, as advising credit card holders to use them properly in order to avert future problems including defaulting on debt to banks.
“Credit card holders should not spend in a way that surpasses their financial resources because this means they will default…they should also pay fees on time to reduce interest fee on the remaining balance,” he said.
“I also advise them to review their accounts on a monthly basis and to contact their bank to enquire about any unclear information in the account statement…this will allow card holders to control their spending style and rationalise their expenses when necessary.”