Ramadan 2021: The best bank offers to help stretch your dirhams further

From loan repayment holidays to credit card discounts and car loan offers, here’s how to ease your personal financial situation during the holy month

It can pay to be practical and even consider a card you may not have heard of before, or carry multiple cards at once for different types of purchases. Photo: Getty Images

As banks capitalise on the occasion of Ramadan with special offers, UAE residents have an opportunity to save money during the holy month. From loan repayment holidays to credit card discounts, there is something to fit your own financial situation this year.

“There are many Ramadan offers around the UAE at the moment, varying from car and loan offers all the way to one-for-one iftar offers,” says Ambareen Musa, founder and chief executive of financial products comparison website Souqalmal.com.

“Banks are no different. They also realise that a lot of UAE residents are still going through a tough time and they have put offers out there from higher rates on savings accounts to special cashbacks on salary transfers and their credit cards.”

Ms Musa advises residents to consult their bank’s website and, for once, pay attention to the marketing text messages they receive.

“Ramadan deals are generally very generous and worth looking at how you can save,” she says.

However, residents are advised not to fall into the trap of succumbing to an attractive offer that may work to their disadvantage.

Keren Bobker, an independent financial adviser and senior partner at Holborn Assets, says one should think about the potential consequences of each offer – particularly when it comes to credit cards and other types of cash advances.

“I have seen adverts for loans and credit cards, suggesting people use these to buy gifts, which is a terrible idea. No one should borrow money to buy presents,” says Ms Bobker.

“Credit cards can be a useful tool but they should not be used to cover daily expenses as it is too easy to build up a large balance and people then become stuck in a cycle of only paying interest each month and nothing more. That means they never reduce the balance and end up paying a large amount of interest as rates on cards are very high.”

She says that credit cards should only be used for emergencies unless you can pay off the balance each month. When people take out credit cards, banks need to do a better job of explaining how the interest works and the consequences of not repaying balances, says Ms Bobker.

Banks have put offers out there from higher rates on savings account to special cashback on salary transfers and their credit cards

Ms Musa sounds a similar note of warning.

“Watch out for terms and conditions and fees associated if you are looking at taking a new card only to avail of the Ramadan offers. We often are excited by the short-term offers but do not realise the costs of the card after the promotional offer.”

Here are some ways to use bank offers to your advantage this Ramadan:

Book a loan repayment holiday

Abu Dhabi Islamic Bank customers who are struggling to make ends meet because of the extra expenses that come with Ramadan can ask for a payment holiday on any personal or car loan at no extra cost.

The bank’s aim is to address and cater to customers’ individual finance requirements, says Philip King, global head of retail at ADIB. The offer is valid on instalments due between April 1 and April 31 and eligible customers will be contacted by SMS. The deferral kicks in automatically, but customers who want to continue making payments can choose to opt out.

Similarly, National Bank of Fujairah has a number of offers for UAE residents, including a three-month payment holiday on personal and car finance. Mortgages are not covered by the holiday. The bank also has offers for customers taking out new loans or looking to shop around for lower interest rates.

Good to know: Deferring a loan instalment can lengthen the repayment period, so pay that equated monthly instalment if you can.

Be rewarded for going contactless

If the coronavirus pandemic has yet to prompt you to go contactless, maybe the idea of a few prizes will.

Emirates NBD is running a gamified campaign to convince customers to adopt touch-free payments during Ramadan. A number of prizes are available for customers making contactless payments with their Visa cards, including four BMW 520i cars, 50 75-inch TVs and 200 iPhone 12 units.

The campaign runs until May 31, with every contactless payment through a Visa debit or credit card earning an entry into the draw. Payments for online purchases come with two entries, while using a mobile or wearable wallet gives you three entries. Winners can redeem their prizes by making a further contactless entry.

Good to know: Consider using your debit card for any payments you make so that you avoid spending money you do not have. Only use your card for essential purchases.

I have seen adverts for loans and credit cards, suggesting people use these to buy gifts, which is a terrible idea. No one should borrow money to buy presents

Take advantage of lower interest rates

If you are in the market for a new car or are ready to purchase a new home this Ramadan, shop around for the lowest interest rate. Emirates Islamic has unveiled special offers, including home finance at a reducing rate of 2.75 per cent until May 12 and a car loan at a flat rate of 1.85 per cent until May 31. The bank is also offering personal finance at a flat rate of 2.25 per cent until May 12. All rates are per annum.

On its website, FAB Islamic has announced personal finance at profit rates starting from 2.64 per cent a year — equal to a reducing rate of 4.99 per cent — on loans of up to Dh5 million for Emiratis and Dh2m for residents. A minimum salary of Dh10,000 is required.

Good to know: Pay attention to the type of rate attached to a loan. A flat interest rate applies over the tenor of the loan, while a reducing rate calculates interest on the outstanding balance at pre-decided intervals. Flat rates are generally lower than reducing rates, but the latter usually offer better value. Do the maths before signing on the dotted line.

Pay less for your food and shopping

Discounts are particularly valuable when it comes to groceries and iftar deals, especially with the additional expenses that usually accompany Ramadan. Several banks are offering discounts and cash rebates on credit cards during the month to help your dirhams go further.

Emirates NBD cardholders receive a free iftar when they pay for one at the China Club and Aseelah restaurants in Dubai, and up to 20 per cent off at several other restaurants.

Some deals apply to specific cards. The Emirates NBD LuLu 247 credit card offers up to 7 per cent rewards on daily physical and online spending at all LuLu hypermarkets, while the bank’s U By Emaar credit card enables rewards of up to 7.5 per cent on gifts, clothing and fashion accessories at select malls.

“Whether it is buying groceries, shopping for gifts or other purchases during this time, spending wisely only on what is needed and what you will be able to repay safely over the next few months will help ensure prudent money management,” says Marwan Hadi, executive vice president and head of retail banking UAE at Emirates NBD.

“With gatherings continuing to be limited, it will be wise to list your requirements on a weekly basis and purchase only what is required to reduce wastage.”

Hundred, a recently launched free-to-use mobile app, claims to feature in excess of 20,000 offers from more than 12,000 local and international brand outlets across 200 bank cards. Photo: Courtesy Hundred

Those who have more than one credit card will appreciate the ease of a comparison app. Recently unveiled free mobile app Hundred claims to have more than 20,000 offers from more than 12,000 local and international brand outlets across 200 bank cards.

“Our objective behind designing this app was to help users save money by maximising the offers available to them through their digital devices, wherever they are,” says Nitin Agarwal, president of Hundred.

The app pools credit card offers from several banks, including Abu Dhabi Commercial Bank, ADIB, Standard Chartered, Dubai First and First Abu Dhabi Bank. Mr Agarwal says FAB and Commercial Bank of Dubai are among the best for cashbacks on supermarket purchases, while the ADIB Edge, Mashreq Cashback and Emirates NBD U By Emaar credit cards offer good value at restaurants.

Good to know: Credit card deals are only worth it if you pay your bill in full by the due date. Any savings are cancelled out by interest rates on amounts carried over to the next month.