<span class="Apple-style-span" style="font-weight: bold; ">Credit-card customers will be overjoyed when they hear the UAE Central Bank is in the process of finalising rules that will cap the interest rate banks charge on credit cards at 18 per cent a year.</span> The news was reported on Tuesday in the Arabic newspaper, Al Khaleej, with the Sharjah-based publication claiming the new rules will be announced in February. Banks in the UAE currently charge between 27 and 36 per cent - much higher than those set by other Gulf nations such as 18 per cent in Qatar and Kuwait and up to 24 per cent in Saudi Arabia. This is another sign the UAE authorities are trying to strengthen the banking sector by limiting lender's credit exposure. The news comes eight months after the Central Bank introduced new banking regulations that required all lenders in the UAE to scrap a raft of fees, including minimum-balance charges, and cap personal loan amounts to 20 times a person's salary limit. The loan repayment period was also set at 48 months and it was ruled that car loans could only be issued to those who put down a 20 per cent deposit. When this new interest rate cap will be introduced is unclear, as is how the banks will react to another curb on the charges they can make. Similarly, how this will impact the consumer is difficult to predict. While in theory, the credit-card holder could be better off by having less interest charged to their monthly bill - there is the risk that the bank will introduce an annual fee on a "free" credit card or increase the annual or monthly fee that already exists. <b>Whatever the consequences, the Personal Finance team is waiting with bated breath and will update you the minute the changes are made.</b>
