The Debt Panel: Dubai bride struggling with Dh40,000 in wedding debt

The newlywed, who earns Dh10,000 a month, wants to reduce the debt, spread across three credit cards, as quickly as possible.

Clockwise from top left: Ambareen Musa, founder and chief executive of, The National columnist Keren Bobker, Rasheda Khatun from Financial Life Planner, and Jamel Alvi, chief credit officer of Abu Dhabi Islamic Bank, during a round-table panel discussion on why people are getting into excessive debt, how this situation can be resolved and where they can turn for help. Ravindranath K / The National and Marwan Alhammadi / The National
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I earn Dh10,000 a month but have outstanding debts of Dh40,000 on my three credit cards. I want to pay them off as soon as possible. I am living hand-to-mouth and the credit card payments are not allowing me to save. I built up the debt because of some random shopping I did for myself and my family during my wedding period this April. I was using balance transfers as an option [to reduce the interest rate] but I couldn't resist spending on one card after the balance had been transferred to another. I am currently supporting my family, as my parents are retired, and also my husband has just relocated here and is looking for a job. What is the best option for me to consolidate all three cards and lower the interest and minimum monthly payment? I want to settle this at the earliest and also have some money left over for me at the same time. SA, Dubai

Debt panellist 1: Ambareen Musa, founder and chief executive of

It’s great that you’re eager to settle your debts, but making minimum payments on your credit cards is far from the ideal solution.

Making a low minimum payment every month may seem like a quick-fix but as you prolong repayment, the debt will only grow larger. Average annual interest rates (APR) on credit cards in the UAE hover around 40 per cent. So the longer you take to repay, the more the interest accrues, and this can quite possibly turn into a vicious cycle of debt. While it’s good to have some emergency savings on the side, your first focus should be to get rid of the debt.

Assuming that all your debt is on credit cards, you could take a salary-transfer personal loan at a lower rate from your primary bank. The loan can be used to offset all the credit card debt at once, which will save you thousands in interest repayments. Alternatively, you can also apply for a debt consolidation loan to convert the outstanding debt on your three credit cards into one loan with a fixed monthly instalment and loan tenure.

I also understand that you’ve explored the balance transfer option earlier. But to be able to take full advantage of this option, you must aim to pay off as much of the outstanding amount as you possibly can within the initial zero interest or low interest period.

Once you’ve decided what to do about the debt, there’s an even bigger responsibility on your shoulders – to efficiently manage your monthly expenses. Make a list of your expenses, and analyse where you can cut back. Allocate money towards debt repayment at the exact time your salary hits your account.

Also, look for innovative ideas to help you repay the debt faster and sooner. Can your husband take up a temporary or part-time job initially to help supplement your income? Do you have any savings back home that your parents can use for a few months? If yes, you can then use a bigger chunk of your salary to repay your debt here before you resume your monthly remittances.

Debt panellist 2: Jamal Alvi, chief credit officer at Abu Dhabi Islamic Bank

Debt consolidation is the ideal solution for you. The entire credit card debt of Dh40,000 can be converted into an instalment loan with repayment over a period of up to four years in equal monthly instalments. You can also negotiate a discount on credit balances by offering a one-time full settlement. This can be offered by the bank where your salary is being transferred. If your current bank is not willing to offer this, you can transfer your salary to another bank. There are quite a few banks offering debt consolidation to overleveraged customers as long as they are backed by salary transfer. Best of luck.

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; 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

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