The Debt Panel: 'how do I negotiate an affordable settlement for my unpaid credit card dues?'

The South African left the UAE in 2017 due to ill health and now wants to repay the outstanding amount

Illustration by The National 
Beta V.1.0 - Powered by automated translation

I am 51 and left the UAE in October 2017 due to illness, as I could not afford my medical care. When I left I had an outstanding credit card debt of Dh10,000. I later sent numerous emails to the bank to repay the debt but the customer service department took a long time to get back to me. When they finally did get in touch, they told me the debt had mushroomed to Dh35,000. This is because they did not respond to my numerous calls and emails to resolve this. They have said they will accept Dh20,000 to clear the debt: a lump-sum payment of Dh6,000 and then monthly payments of Dh1,750. However they wanted the lump sum quickly last month, before my salary came in, and would not entertain me waiting until I am paid. Ideally, I want to pay them on May 10 when everything has cleared. The bank said if I wait longer, the amount I have to repay will change. Their solution is that I borrow the money to repay them.

When I was in the UAE I lived in Ajman and worked in Sharjah as teacher. During my time there, I also had to provide for my family back home in South Africa. I borrowed the money to pay for some flight tickets and paid monthly instalments. My monthly salary in the UAE was Dh8,000 and my employer deducted Dh2,000 for accommodation leaving me with only Dh6,000, which was not enough to pay off the debt in one go.

I have been working in Oman since August last year and work in a wonderful school where my only expenses are car rental of Omani riyals 175 (Dh1,669).  

I am still providing for my family in South Africa and ideally want to repay Dh1,000 a month to clear the debt. I have heard debts can be handed over to police who arrest you once you try to enter the country. How can I solve this mess? HS, Oman

Debt panellist 1: Philip King, head of retail banking at Abu Dhabi Islamic Bank

It is inadvisable to leave the UAE with outstanding debt no matter of your personal circumstances. Despite this, I’m not sure how your card borrowings of Dh10,000 increased to Dh35,000 in such a short time. You should have this checked through the account statements on what actually has caused this pile up. If you need to wait until May 10 before you can afford to make the lump sum payment, then you should be firm with the bank and reiterate that you’re sticking to this date.

At this stage, you should not be looking to take out a loan, which would only increase your debt burden and take time to process and reach your account in any case. Instead, wait until your salary is in your account, make the repayment and inform the bank that you have done so. You should then ensure you make every monthly repayment of Dh1,750 on time to avoid incurring further charges. In future, be careful spending on cards to avoid falling into a similar situation.

Debt panellist 2: Ambareen Musa, founder and chief executive of

Credit card debt, when left unpaid, can spiral out of control. And considering how exorbitant credit card interest rates are in the UAE, it's no surprise that your debt has gone through the roof too. That being said, it is highly unlikely that your outstanding balance of Dh10,000 would have more than tripled in less than two years.

To start off, ask the bank for a detailed statement of your credit card account. You should not agree to a settlement deal without understanding exactly what you owe. You should also procure a copy of your credit report issued by Al Etihad Credit Bureau. Once you get a clear picture of the interest you've accumulated, along with the late payment penalties, you can negotiate better with your credit card provider.

As for the actual negotiation, explain your side of the story to the bank. If you have any proof of written communication that went unanswered in the past, make sure you use it now to build your case. It is also important to understand that you must be willing to meet the bank half way and also be realistic in your expectations. Remember: banks always favour a lump-sum settlement when it comes to debt default. In fact, you may be able to negotiate a much better deal if you offer to pay all your debt off in one go. Once the debt is paid off be sure to close the credit card account and ask the bank for a proof of closure and no-liability certificate.

It would not be a bad idea to scout for personal loan options that charge you a much lower interest rate than what you were being charged on your credit card. Compare personal loan products in Oman, and approach your primary bank in the country to try to secure a low-cost salary-transfer loan.

On the personal front, make debt repayment your number one priority. Take into account your monthly income and work with a budget to manage your finances better. Make cutbacks wherever you can and put all your effort and resources towards becoming debt free.

Debt panellist 3: Rasheda Khatun Khan, founder of Design Your Life

When paying off debt becomes a challenging process, frustration can kick in, so well done for persevering. Ask to speak to someone at the bank who can look at your entire case. Provide a full explanation including emails previously sent on your attempts to make payment. Provide a full breakdown of your current income and expenses and your current level of affordability. Look at what you can comfortably afford on your currently salary and request that. A  solution could be that you pay over a longer period of time. Being able to make an initial repayment helps you negotiate a monthly repayment that fits you. If you can borrow from friends or family to help this happen, ensure you commit to a repayment structure that you can stick to.

When going through your expenses it's important to put some money aside towards building an emergency fund. Nine times out of 10, people get into debt because they did not plan for unexpected expenses and start saying yes to things they cannot afford. Spending money on a credit card without having a payment plan is the most expensive form of borrowing as interest rates are on average around the 40 per cent mark and this does not include late payment fees. Having an emergency fund means you can handle the unexpected without getting yourself into debt. Unexpected costs are inevitable; we must plan for them.

The Debt Panel is a weekly column to help readers tackle their debts more effectively. If you have a question for the panel, write to