As the cost of living edges higher and UAE residents look for smarter ways to manage day-to-day spending, credit cards are emerging as more than just a convenient means of payment – they’re becoming a gateway to savings, flexibility and better financial control.
Yet for many people, credit cards still come with a stigma: overspending, high interest rates, or a slippery slope into debt. While those risks are real, when used responsibly, credit cards can support financial goals rather than impede them, especially in a digital-first economy like the UAE.
Avoiding interest and late fees
The first step in using credit to your advantage is understanding the system: how billing cycles, grace periods and annual percentage rates (APR) work.
Each card operates on a billing cycle – usually 30 days – during which your balance can be paid without incurring interest. If you pay in full and on time, you avoid borrowing costs altogether.
The APR (often expressed as a monthly rate) shows the borrowing cost of your card, determined by your interest rate and standard fees. Late payments can increase your APR. Interest begins to accrue – usually calculated daily, which can catch people off guard. This means if a payment is overdue, interest must be paid on the outstanding balance, plus any accumulated interest.
Even if you’re only slightly late, it may not affect your credit score immediately, but you’ll likely incur penalties or fees. Many consumers pay just the minimum amount, and while it is always better to pay the minimum over nothing, over time, an outstanding balance can lead to a large debt or interest charges.
Paying your balance on time ensures you evade increased rates, improve your credit score, which can help you access banking services like loans.
Tip: Set up automated payments or calendar reminders to ensure you do not miss a due date.
Earn while you spend
Credit cards can also help you stretch your dirham further through rewards, cashback and offers. To optimise your rewards, choose a card that best aligns with your spending habits. Many banks provide cards designed to suit lifestyles – with benefits tied to fuel, groceries, travel, dining and even school fee payments.
Choosing the right card means knowing where your money goes each month. For example, a cashback card that rewards fuel purchases may suit someone with a long daily journey to and from work, while frequent travellers might benefit more from air miles or airport lounge access.
Tip: Understanding terms like spending caps, category limits, expiration rules, etc, is crucial to fully unlocking reward benefits. If there is any uncertainty regarding credit card reward programmes, it is always best to contact the bank directly for more information.
Instalments and balance transfers
Another advantage of credit cards lies in instalment plans and balance transfers. Many banks in the UAE allow big-ticket purchases to be converted into interest-free monthly instalments, helping consumers manage budgets without depleting savings.
Balance transfers, on the other hand, are ideal for those carrying outstanding credit card balances. Transferring the balance to a new card with lower or zero per cent interest (for a limited period) allows consumers to pay off debt more efficiently.
Some plans may charge an early repayment fee if you settle your balance before the agreed period. If you miss a payment during this promotion period, your interest rate will change to the original or a higher rate. Likewise, once the promotion period has passed, any pending balance will be charged at the original interest rate of the card.
If used effectively, balance transfer plans and instalment plans are great tools to help manage expenses.
Tip: Always read the fine print, including early repayment charges and post-promotion APRs.
Credit can help build, not just borrow
Credit cards are critical for building credit history and financial credibility. Timely payments help to strengthen your credit score – an important factor when applying for loans, leasing property, or accessing other financial products in the UAE.
Used wisely, a credit card can function as a financial safety net, helping you manage emergencies, plan big purchases, and unlock value through tailored rewards, all without compromising your financial health.
The key to credit card success isn’t avoidance – it’s awareness. By understanding how credit works and aligning your use with your personal goals and budget, you can turn your card into a valuable financial ally.
Kartik Taneja is head of payments and consumer lending at Mashreq
Queen
Nicki Minaj
(Young Money/Cash Money)
FIGHT CARD
1. Featherweight 66kg
Ben Lucas (AUS) v Ibrahim Kendil (EGY)
2. Lightweight 70kg
Mohammed Kareem Aljnan (SYR) v Alphonse Besala (CMR)
3. Welterweight 77kg
Marcos Costa (BRA) v Abdelhakim Wahid (MAR)
4. Lightweight 70kg
Omar Ramadan (EGY) v Abdimitalipov Atabek (KGZ)
5. Featherweight 66kg
Ahmed Al Darmaki (UAE) v Kagimu Kigga (UGA)
6. Catchweight 85kg
Ibrahim El Sawi (EGY) v Iuri Fraga (BRA)
7. Featherweight 66kg
Yousef Al Husani (UAE) v Mohamed Allam (EGY)
8. Catchweight 73kg
Mostafa Radi (PAL) v Abdipatta Abdizhali (KGZ)
9. Featherweight 66kg
Jaures Dea (CMR) v Andre Pinheiro (BRA)
10. Catchweight 90kg
Tarek Suleiman (SYR) v Juscelino Ferreira (BRA)
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Results
6.30pm: Baniyas (PA) Group 2 Dh195,000 1,400m | Winner: ES Ajeeb, Sam Hitchcock (jockey), Ibrahim Aseel (trainer)
7.05pm: Maiden (TB) Dh165,000 1,400m | Winner: Al Shamkhah, Royston Ffrench, Sandeep Jadhav
7.40pm: Handicap (TB) Dh190,000 1,200m | Winner: Lavaspin, Richard Mullen, Satish Seemar
8.15pm: Maiden (TB) Dh165,000 1,200m | Winner: Kawasir, Dane O’Neill, Musabah Al Muhairi
8.50pm: Rated Conditions (TB) Dh240,000 1,600m | Winner: Cosmo Charlie, Pat Dobbs, Doug Watson
9.20pm: Handicap (TB) Dh165,000 1,400m | Winner: Bochart, Richard Mullen, Satish Seemar
10pm: Handicap (TB) Dh175,000 2,000m | Winner: Quartier Francais, Fernando Jara, Ali Rashid Al Raihe
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Business Insights
- As per the document, there are six filing options, including choosing to report on a realisation basis and transitional rules for pre-tax period gains or losses.
- SMEs with revenue below Dh3 million per annum can opt for transitional relief until 2026, treating them as having no taxable income.
- Larger entities have specific provisions for asset and liability movements, business restructuring, and handling foreign permanent establishments.
Ready Player One
Dir: Steven Spielberg
Starring: Tye Sheridan, Olivia Cooke, Ben Mendelsohn, Mark Rylance
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
Dunki
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