I have three credit cards with a total outstanding balance of Dh34,000 and a personal loan on which I owe Dh53,000. My salary for my job in Dubai as an administrator is only Dh5,000. I moved to the UAE from the Philippines four years ago and got into this situation because of my own irresponsibility – I took too many cash advances on the credit cards and spent the money on this and that. I want to consolidate all of these debts and convert them into a single payment but I have approached so many banks to settle this and they say that with this much on my credit cards, they cannot offer me a loan. Please advise what my next step should be as I do not know what to do. KM, Dubai
Debt panellist 1: Jamal Alvi, chief credit officer at Abu Dhabi Islamic Bank
As per the UAE Central Bank regulations, the maximum amount of loan that can be given to an individual is 20 times the salary, provided the repayment period is not more than four years and the monthly instalment does not exceed 50 per cent of your salary. With a Dh5,000 salary you can technically borrow up to Dh100,000. But this is subject to a 50 per cent monthly instalment cap where the interest rate plays a part. For example, if the bank charged 18 per cent on your total debt balance of Dh87,000, the monthly instalment would be Dh2,556, which will be more than the 50 per cent cap. It is also a credit appetite and internal policy matter for the banks. I think you will find it difficult for any bank to consolidate your card debt – given your salary and debt level. The best option is to get into a settlement agreement with your card issuers and raise cash to pay down from personal sources, like selling assets.
Debt panellist 2: Ambareen Musa, founder and chief executive of Souqalmal.com
First, it is very important to address the spending pattern that made you accumulate debts that are more than 17 times your income. The only way forward is for you to have a better grasp of your finances by budgeting your income and expenses to enable you to lead a financially responsible life.
Credit cards are a very expensive way of borrowing money and they should not be used as a financing tool because of the high interest rates they charge in case the amount due is not paid in full within the interest-free period. What might be a good option is for you to approach the bank(s) with which you have your credit cards and check if you can restructure the outstanding balance into a loan. That would save you a hefty amount of money in interest payments, and your instalments will be more affordable. Once you manage to repay the outstanding amount on your credit cards, it would be advisable to cancel all your credit cards and just keep one for emergencies.
Another option to consider is approaching your friends and family. Check if they can provide you with an interest-free loan that you can use to pay off your financial obligations, especially the ones with the highest interest rate. You can also tap into any asset you might own that you can sell to repay a part of your debt. Can you also look into an additional source of income such as freelancing as long as this doesn’t violate your employment contract?
The Debt Panel brings together four financial experts: Jamal Alvi, the chief credit officer at Abu Dhabi Islamic Bank; Ambareen Musa, the founder and chief executive of the comparison website Souqalmal.com; Rasheda Khatun Khan, a wealth and wellness planner and founder of Design Your Life; and Keren Bobker, The National's On Your Side columnist and an independent financial adviser with Holborn Assets in Dubai. Together they answer queries in a weekly online column to help readers better tackle their debts. If you have a question for the panel, write to pf@thenational.ae.
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COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
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German intelligence warnings
- 2002: "Hezbollah supporters feared becoming a target of security services because of the effects of [9/11] ... discussions on Hezbollah policy moved from mosques into smaller circles in private homes." Supporters in Germany: 800
- 2013: "Financial and logistical support from Germany for Hezbollah in Lebanon supports the armed struggle against Israel ... Hezbollah supporters in Germany hold back from actions that would gain publicity." Supporters in Germany: 950
- 2023: "It must be reckoned with that Hezbollah will continue to plan terrorist actions outside the Middle East against Israel or Israeli interests." Supporters in Germany: 1,250
Source: Federal Office for the Protection of the Constitution
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How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
Quick pearls of wisdom
Focus on gratitude: And do so deeply, he says. “Think of one to three things a day that you’re grateful for. It needs to be specific, too, don’t just say ‘air.’ Really think about it. If you’re grateful for, say, what your parents have done for you, that will motivate you to do more for the world.”
Know how to fight: Shetty married his wife, Radhi, three years ago (he met her in a meditation class before he went off and became a monk). He says they’ve had to learn to respect each other’s “fighting styles” – he’s a talk it-out-immediately person, while she needs space to think. “When you’re having an argument, remember, it’s not you against each other. It’s both of you against the problem. When you win, they lose. If you’re on a team you have to win together.”
Ultra processed foods
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- margarines and spreads; cookies, biscuits, pastries, cakes, and cake mixes, breakfast cereals, cereal and energy bars;
- energy drinks, milk drinks, fruit yoghurts and fruit drinks, cocoa drinks, meat and chicken extracts and instant sauces
- infant formulas and follow-on milks, health and slimming products such as powdered or fortified meal and dish substitutes,
- many ready-to-heat products including pre-prepared pies and pasta and pizza dishes, poultry and fish nuggets and sticks, sausages, burgers, hot dogs, and other reconstituted meat products, powdered and packaged instant soups, noodles and desserts.
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