I work for a UAE bank and have credit cards with five UAE financial institutions with outstanding balances of approximately Dh55,000. I also have a personal loan of Dh25,000 with another bank. I’ve been working in Dubai for more than two years and live in Sharjah. I want to clear my cards by converting them into a personal loan or by some other way. I am aware of debt reconciliation and card buyout methods available in the UAE but being a banker I can’t transfer my salary to avail these facilities. Also as per my research, none of the financial institutions offers these facilities to bankers. Can you suggest a way out? RM. Dubai
Debt panellist 1: Ambareen Musa, founder and chief executive of Souqalmal.com
I am glad to hear that you’re trying to sort out your personal finances before you further fall into a debt spiral. In your case, your total debt amounts up to about Dh80,000 which is a manageable amount, and with a change in mindset and determination, it can be paid off. Since you have five credit cards, you need to focus on cancelling them as this form of debt can quickly and easily accumulate. Between the five credit cards, aim to pay off the ones with the highest interest rate first as you want to get rid of that sooner. After that, work towards paying off the cards with the lower interest.
Another option is checking if your credit cards offer the balance transfer facility. This way you can transfer a chunk of your outstanding credit card balance to the card with the lowest interest rate. Check with your banks If you have the option and if they can offer you a good deal as there may be a processing fee of around 2.5 per cent in order to avail of this service.
If you’re looking to consolidate your debt, would it be possible to talk to your current bank? Explain to them the situation and ask if they can negotiate new repayments terms in your case. If your bank is not an option, it’s still worth contacting other banks to find out if you can apply for a debt consolidation loan even if you can’t transfer your salary. Some institutions based on your profile (salary, place of work and length of service) might consider merging your entire debt.
Debt panellist 2: Jamal Alvi, chief credit officer at Abu Dhabi Islamic Bank
Being a banker, you should be careful not to take out cards from other banks. Most banks offer discounted credit facilities to their staff. You should make use of this to settle card debt from other banks. You may get a discount on the fees and charges if you offer a full settlement. And remember, credit card is a payment product. You should spend only as much every month that you can pay in full.
The Debt Panel brings together four financial experts: Jamal Alvi, the chief credit officer at Abu Dhabi Islamic Bank (ADIB); 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.
