The Debt Panel: 'I've been paying off my credit cards for 11 years'

The father-of-three says he spends Dh2,000 more than his Dh18,000 income every month

Illustration by Mathew Kurian 
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I have been struggling with credit cards since moving from Sri Lanka to Dubai 11 years ago. At one point I had six cards from different banks before I took out a loan to settle the debts, cancelling some of the cards in the process. Now I have two cards left as well as a personal loan, which I have topped up four times. The monthly payments on my cards are ballooning and I am struggling to keep up.

I support a family of five, including myself, and I am the only one working. I tried to restructure the loan again, but the bank refused saying I have already had four top ups. My debts are: outstanding balance / monthly payment

Credit card 1: Dh17,656 (minimum payment)

Credit card 2: Dh24,253 (minimum payment)

Personal loan: Dh145,159 (Dh5464)

Car loan: Dh50,208 (Dh1,068)

Total: Dh237,276

I earn Dh18,000 a month working in finance for a large multinational in Jebel Ali, but after paying school fees, rent and the debt repayments, we are basically negative which forces me to use the credit cards again. On top of this, I’ve made zero savings in the last 11 years in Dubai. I have not missed any payments, but this month I asked for a "payment holiday" on some of the products.

I have tried securing a consolidation loan from the bank my salary is credited to, which is also the lender for the personal loan, but they refuse to negotiate because of all the top-ups in the past.

My wife and I recently sat down to figure out how to reduce our expenses, but even after we cut down we are still spending Dh2,000 more than my monthly income.

We need to plan for the future of my children and this debt has basically taken away that chance. I overspent on my credit cards and then borrowed more to pay them off and as you can see I am bad at managing this. What advice can you give me? MI, Dubai

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

Restructuring a loan is not the same as topping it up. With a loan top-up, you're able to access additional finance from the same lender, based on your eligibility. But loan restructuring can help ease your financial distress through a renegotiation of the terms of your existing loan. This could involve increasing the loan tenure, reducing the interest rate, converting outstanding credit card balances into a fixed tenure loan or waiving off penalties. All types of loans as well as credit cards can be restructured if the lender is willing to do so. It is in the bank's interest to enable you to pay off your debts.

No matter what route you choose, take action while you're still managing to pay your loan instalments and minimum credit card payments.

It would be a good idea to submit a request in writing to your primary lender, explaining how you're on the verge of defaulting on your payments. Express your intention to pay off your debts and seek a restructured repayment plan that you can keep up with, given your current financial circumstances. Don't rule out loan consolidation either. Even if the primary lender agrees to only consolidate the loan and credit card you hold with them, it would still help plug hefty interest payments on one of your cards. Alternatively, approach other lenders to see if they can offer you a consolidation loan, although this would require transferring your salary relationship to the new lender.

If you don't see yourself making any headway, you could also approach an authorised debt counselling and debt management agency to negotiate with lenders on your behalf. Since your Debt Burden Ratio is still under 50 per cent, you should be able to avoid diving into insolvency proceedings right away.

No matter what route you choose, take action while you're still managing to pay your loan instalments and minimum credit card payments. Waiting until things get out of hand and your repayment default starts to reflect on your credit score will make it even more difficult to negotiate with banks.

Debt panellist 2: R Sivaram, executive vice president, head of retail banking products, Emirates NBD

I urge you to reach out to other banks and discuss the possibility of debt consolidation as this would enable you to consolidate your total outstanding of Dh237,276 into one single personal loan. This is a financial solution offered by most UAE banks and would be well suited to your situation.

To secure this service, a bank may require you to transfer your salary to them and close your existing credit cards on settling dues. This is for your benefit and will help you control your monthly expenditure.

Your current salary, employment status and the fact you have been paying all your dues regularly will all positively impact your application for a debt consolidation loan. This will allow you to significantly lower your monthly instalment obligations. It will also ensure you have only one instalment to pay each month which will help you manage your disposable income more prudently.

You are addressing your financial situation in a timely manner and you will hopefully soon begin the path to financial stability.

Debt panellist 3: Steve Cronin, founder of

You have been addicted to debt and credit cards, and the saddest thing for me is that it has wiped out any savings you could have made for 11 years. I’m sure there are many others out there in your situation and if you earn that extra Dh2,000 a month by teaching people in your community about the perils of debt then so much the better. It is commendable that you have not missed any payments and have been trying to reduce expenses. But where is the monthly overspend going to come from? Something has to change.

Try to talk to someone more senior at your bank to secure a consolidation loan. You have a high enough salary and room to make higher monthly payments under the DBR calculation if both cards were consolidated into the loan. You must also talk to other banks and see if they are willing to take on your salary plus a consolidation loan. Remember, your salary and good payment history both work in your favour. Do not accept offers of a top-up loan — that will put you further in debt.

Meanwhile, stop using your credit cards until you can consolidate them or completely pay them off. Your card balances are the most dangerous parts of this — as before, they will keep ballooning due to high interest rates.

A consolidation loan will take the pressure off but you must still reduce expenses and find a way for your family to get through this. Can you sell your car to free up some cash and reduce your monthly payments? If your car is fairly new then you may find it will cost you money to sell it, as the loan balance is higher than the car value. That would be clear evidence of living beyond your means. If not, would renting a cheap car be less costly than your car loan? Or you can use a car-sharing company such as ekar to rent a car only when you need it.

Your whole family needs to be engaged in the process of generating income and reducing expenses. Can you get a pay rise or work extra hours? Is there a better-paying job out there for you? Is there any kind of side activity you can do on evenings and weekends to raise extra money? Get creative and think what your skills are. Can your wife work at all? I appreciate raising kids is time-consuming and expensive. Is there any freelance work she can do from home?

If things get extreme, you may need to homeschool your kids for a year, stop sending money home or move your family back to Sri Lanka while you sort out your debt problem. Your family can endure tough conditions as long as everyone does it with clear intention. Once you get through the other side and are debt-free, you will have a discipline and money-savviness that will serve you much better for a prosperous future.

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