More than a quarter of bank customers surveyed by a financial comparison website admitted to using loans or credit cards to pay off other debts.
About 28 per cent of respondents in a compareit4me.com poll said they had borrowed to pay off old debt. A quarter of those surveyed had more than three credit cards.
Credit growth has outstripped economic growth continually since 2009. Last year, the country’s credit-to-GDP gap, a measure of banking system stability, was higher than both the US and UK.
Household loans have grown by about 12 per cent in the past year, according to data from the UAE’s central bank, while deposits have grown by only 10 per cent, indicating an increase in the country’s credit-to-GDP gap.
Accelerating inflation is also eating into living standards for many. Economists predict that inflation could hit 5 per cent in Dubai before the end of the next year, as housing allowances and incomes fail to keep pace with rent increases.
But despite economic headwinds, consumers should take care to pay off debts using products with lower interest rates, financial advisers said.
Annual percentage rates (APR) vary significantly across debt products, meaning consumers could save sizeable amounts of money by switching from a credit card to a personal loan.
“You have got to be careful about refinancing,” said Ambareen Musa, chief executive of Souqalmal, a financial comparison website. “When you consolidate debt, sometimes it can be cheaper and other times it can be more expensive.
“When refinancing existing debt there could be fees. There may be arrangement fees if you take out a personal loan, and there may be transfer fees if you move money from one bank to another,” Ms Musa said.
Consumers also need to make sure that the duration of the loan does not lead to higher total interest payments.
With a personal loan, “you may have a lower rate, but you may also be repaying the new debt over a longer period”, Ms Musa said. “That means you could end up paying more interest in total.”
The consumer also needs to check whether any new loan terms include “flat rate” interest payments or “reducing rate” payments. Flat rate payments are calculated against the total value of the principal on a loan, while reducing rate payments take into account any repayments of principal.
Increased competition in the banking sector is benefiting consumers, Ms Musa said, as a wider range of products becomes available and lending rates fall.
“More consumers are seeing they can refinance their debts at lower rates, because they’re finding they can refinance at lower rates in the market,” she said.
The survey was based on 2,378 respondents.
abouyamourn@thenational.ae
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The specs
Engine: Direct injection 4-cylinder 1.4-litre
Power: 150hp
Torque: 250Nm
Price: From Dh139,000
On sale: Now
Ain Dubai in numbers
126: The length in metres of the legs supporting the structure
1 football pitch: The length of each permanent spoke is longer than a professional soccer pitch
16 A380 Airbuses: The equivalent weight of the wheel rim.
9,000 tonnes: The amount of steel used to construct the project.
5 tonnes: The weight of each permanent spoke that is holding the wheel rim in place
192: The amount of cable wires used to create the wheel. They measure a distance of 2,4000km in total, the equivalent of the distance between Dubai and Cairo.
Company%20Profile
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Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
The biog
Alwyn Stephen says much of his success is a result of taking an educated chance on business decisions.
His advice to anyone starting out in business is to have no fear as life is about taking on challenges.
“If you have the ambition and dream of something, follow that dream, be positive, determined and set goals.
"Nothing and no-one can stop you from succeeding with the right work application, and a little bit of luck along the way.”
Mr Stephen sells his luxury fragrances at selected perfumeries around the UAE, including the House of Niche Boutique in Al Seef.
He relaxes by spending time with his family at home, and enjoying his wife’s India cooking.
The biog
Favourite films: Casablanca and Lawrence of Arabia
Favourite books: Start with Why by Simon Sinek and Good to be Great by Jim Collins
Favourite dish: Grilled fish
Inspiration: Sheikh Zayed's visionary leadership taught me to embrace new challenges.
Signs a child has digital addiction
1. Spending an excessive amount of time on the phone.
2. Neglecting personal, social, or academic responsibilities.
3. Losing interest in other activities or hobbies that were once enjoyed.
4. Having withdrawal symptoms like feeling anxious, restless, or upset when the technology is not available.
5. Trying but failing to reduce phone use multiple times.
6. Experiencing sleep disturbances or changes in sleep patterns.
7. Experiencing physical problems such as eye strain, neck pain, or thumb and wrist pain.
8. Encountering friction with family and friends over the amount of time spent on the screen.
Tributes from the UAE's personal finance community
• Sebastien Aguilar, who heads SimplyFI.org, a non-profit community where people learn to invest Bogleheads’ style
“It is thanks to Jack Bogle’s work that this community exists and thanks to his work that many investors now get the full benefits of long term, buy and hold stock market investing.
Compared to the industry, investing using the common sense approach of a Boglehead saves a lot in costs and guarantees higher returns than the average actively managed fund over the long term.
From a personal perspective, learning how to invest using Bogle’s approach was a turning point in my life. I quickly realised there was no point chasing returns and paying expensive advisers or platforms. Once money is taken care off, you can work on what truly matters, such as family, relationships or other projects. I owe Jack Bogle for that.”
• Sam Instone, director of financial advisory firm AES International
"Thought to have saved investors over a trillion dollars, Jack Bogle’s ideas truly changed the way the world invests. Shaped by his own personal experiences, his philosophy and basic rules for investors challenged the status quo of a self-interested global industry and eventually prevailed. Loathed by many big companies and commission-driven salespeople, he has transformed the way well-informed investors and professional advisers make decisions."
• Demos Kyprianou, a board member of SimplyFI.org
"Jack Bogle for me was a rebel, a revolutionary who changed the industry and gave the little guy like me, a chance. He was also a mentor who inspired me to take the leap and take control of my own finances."
• Steve Cronin, founder of DeadSimpleSaving.com
"Obsessed with reducing fees, Jack Bogle structured Vanguard to be owned by its clients – that way the priority would be fee minimisation for clients rather than profit maximisation for the company.
His real gift to us has been the ability to invest in the stock market (buy and hold for the long term) rather than be forced to speculate (try to make profits in the shorter term) or even worse have others speculate on our behalf.
Bogle has given countless investors the ability to get on with their life while growing their wealth in the background as fast as possible. The Financial Independence movement would barely exist without this."
• Zach Holz, who blogs about financial independence at The Happiest Teacher
"Jack Bogle was one of the greatest forces for wealth democratisation the world has ever seen. He allowed people a way to be free from the parasitical "financial advisers" whose only real concern are the fat fees they get from selling you over-complicated "products" that have caused millions of people all around the world real harm.”
• Tuan Phan, a board member of SimplyFI.org
"In an industry that’s synonymous with greed, Jack Bogle was a lone wolf, swimming against the tide. When others were incentivised to enrich themselves, he stood by the ‘fiduciary’ standard – something that is badly needed in the financial industry of the UAE."
2025 Fifa Club World Cup groups
Profile of Whizkey
Date founded: 04 November 2017
Founders: Abdulaziz AlBlooshi and Harsh Hirani
Based: Dubai, UAE
Number of employees: 10
Sector: AI, software
Cashflow: Dh2.5 Million
Funding stage: Series A
