Bank is within its rights to penalise late payments

I have two credit cards with Emirates Islamic with limits of Dh5,000 each. Every month I pay the minimum amount on the same date. This month I was suffering financially and could not pay the minimum on the due date, December 6. Instead, I made the payments on December 8. The bank has charged me a Dh225 fee for late payment. Is it right to apply the late payment charges for just a two-day delay? SM, Abu Dhabi

When anyone takes out a credit card they have to sign the legal terms of agreement and these will include information regarding any fees or penalties for late payment. Emirates Islamic has added this information to its website for anyone to access and it clearly states: “You agree to pay to us the total amount of all charges and fees appearing in the statement of account as the present balance, not later than the payment due date.” In this case the cardholder’s due date is the 6th of each month. The terms go on to state: “The bank reserves the right to charge you fees on any late payments you make.” While two days may not seem much of a delay, the bank is within its rights to charge a penalty and it is likely to be automated – it will happen no matter how short the delay.

Keren Bobker is an independent financial adviser and Senior Partner with Holborn Assets in Dubai, with over 20 years’ experience. Contact her at keren@holbornassets.com. Follow her on Twitter at @FinancialUAE.

The advice provided in our columns does not constitute legal advice and is provided for information only.

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