I need advice to help me consolidate my credit cards and loans into one monthly instalment. I have one loan and three credit card payments due every month that are difficult to pay. The banks say I am not eligible for this kind of consolidation settlement since my debt is Dh160,000. My monthly salary is Dh8,000 and I pay Dh7,200 to the banks every month. This all started when I took a loan to buy land in 2012 and used credit cards for local purchases and airfares and for my personal problems at home. My liabilities are:
Debt / Amount owed/ Monthly repayment
Loan 1: Dh102,180 / Dh3372.6 (Used to clear my credit cards but could not clear all)
Credit card 1: Dh20,300 /Dh 1800 (Used to settle debts with friends)
Credit card 2: Dh31,500 / Dh 1,600 (Lost this money due to online trading)
Credit card 3: Dh14,000 / Dh500 (Used this card for friends that ran away)
Total owed: Dh167,980
My monthly expenses are:
Debt repayments: Dh7,272
Rent: 800
Food: Dh350
Transport: Dh400
Total: Dh8,722
My friends support me with my food and transport costs. I work in logistics in Dubai and only have my sister dependent on my income. I am trying debt consolidation companies to see if they can help, but can you suggest another way? CK, Dubai
Debt panellist 1: Philip King, the head of retail banking at Abu Dhabi Islamic Bank
With a debt burden ratio (DBR) of over 90 per cent, well above Central Bank of the UAE regulations that state the maximum DBR ratio for anyone in the country should not exceed 50 per cent, and total debt of more than 20 times your monthly salary, banks cannot lend any more to you given your current financial situation.
It depends which banks your cards are held with, as they will want to have a full picture of your debt obligations if they are to provide you with a consolidating loan. Rightly, the bank will want to be sure that such financing will be used to immediately pay off and close your cards rather than increasing your debt load further. Given this, you should aim to have a conversation with your bank having clearly considered and set out your repayment intentions so that they are realistic and sustainable.
I have to wonder why you were engaging in online trading using a credit card. Typically, this can be a hugely risky venture and, given market volatility, can result in significant losses in a very short time frame. In addition, lending to friends, even if you trust them, should also be avoided. Not only can this put a strain on any personal relationship, there is a danger that they may abscond, as in your case, leaving you with very little options for recourse.
Instead, you should encourage them to borrow from a regulated lender, preferably a bank. Going forward, you cannot consider engaging in either such behaviours and you must understand that only dedicated and prudent financial management will clear your debt.
Your monthly expenses are already low, and I imagine it will be difficult to reduce these further, especially if you are already being subsidised by friends. If you still own the land that your acquired in 2012, a priority should be to sell this, as well as any other assets of value which will enable you to eat into your total debt. Then you must speak to the bank with which you have all, or the majority, of your borrowing to explain your situation and agree a viable repayment programme. It will take time to clear your total debt – over 40 months if you can settle on monthly repayments of Dh4,000 – but with time and patience you can become debt free.
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Read more:
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Debt panellist 2: Rasheda Khatun Khan, a wealth and wellness planner
Stacking up debt on credit cards, consolidating it onto a loan and then stacking up more credit card debt is an extremely vicious cycle. It is caused by a lack of understanding of how financial products work as well as shortsighted spending habits. Yes, it is easily done and, yes, it can also lead to a painful financial mess as in your case.
Credit cards are so often misused. It's actually the most expensive form of borrowing money but because of its convenient access, many fall into the misuse trap, which then leads into a poor habitual way of spending money. This is when it becomes a very dangerous game and the only outcome is severe debt. More care needs to be taken with credit cards, both from the bank's perspective when it issues the cards, and from the spender's perspective, who is using the card.
The first approach for consolidating should be to the banks that issued the credit cards. As they already have the debt, request to transfer the debt onto a payment plan loan or structure. Explain your situation and make a plea with a suggested affordable monthly repayment amount.
Make an appointment with each bank you have credit card debt with and try to see someone from the lending department. Remember what's important here is that you know your own numbers. Know exactly how much you can pay on each credit card, so you are still left with sufficient money to live on. This should mean that you do not need to use any credit cards to cover any expenses.
Consolidating your debt now will only resolve the surface problem. To solve the issue long term, your must address the source, which is your expenses. The most important question is, what do you need to do to be able to stop using the credit cards all together? If every month you are still relying on cards to pay for living expenses then the problem will not end. So when "debt consolidating", it's crucial that the two ends are addressed - consolidating and living within what's left.
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Read more:
A nine-step guide to help you renegotiate bank debts in the UAE
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The Debt Panel: 'I borrowed Dh50,000 on credit cards to pay family medical expenses and friends' shopping bills'
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Debt panellist 3: Michael Routledge, a debt adviser
Based on your current level of debt, and your salary, you have an extremely high DBR hovering around the 100 per cent mark. There is no way you can pay the debts as they currently stand and will need to negotiate repayment plans with your lenders.
I suggest you prepare a statement of accounts clearly outlining your income, cost of living, and current debts as you have in your email above, offering a little more detail if possible. You should also contact the Al Etihad Credit Bureau and request your credit report. This can be used as additional evidence of your debt when speaking to your lenders. Realistically, your lenders cannot expect you to service all of your debts based on your salary of Dh8,000 per month.
In addition to the above, contact the central bank for guidance with regard to the credit you have been offered. Lenders in the UAE should not offer credit if it exceeds the 50 per cent DBR as outlined by the central bank; you may find it will support your attempts to restructure your debts.
As I often make clear in my responses to requests for debt support, please be ready for a lot of hard work and persistence on your journey to becoming debt free. Your lenders are in the business of making money, and will by no means make the negotiation process easy for you. You must use every ounce of effort you have to make this work, but once you do it will all be worth it.
On this panel this week: Philip King, the head of retail banking at Abu Dhabi Islamic Bank; Rasheda Khatun Khan, a wealth and wellness planner and founder of Design Your Life and Michael Routledge, a UAE-based debt adviser
The Debt Panel is a weekly online column to help readers tackle their debts more effectively. If you have a question for the panel, write to pf@thenational.ae.
Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
Analysis
Maros Sefcovic is juggling multiple international trade agreement files, but his message was clear when he spoke to The National on Wednesday.
The EU-UAE bilateral trade deal will be finalised soon, he said. It is in everyone’s interests to do so. Both sides want to move quickly and are in alignment. He said the UAE is a very important partner for the EU. It’s full speed ahead - and with some lofty ambitions - on the road to a free trade agreement.
We also talked about US-EU tariffs. He answered that both sides need to talk more and more often, but he is prepared to defend Europe's position and said diplomacy should be a guiding principle through the current moment.
UAE currency: the story behind the money in your pockets
Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Men’s singles
Group A: Son Wan-ho (Kor), Lee Chong Wei (Mas), Ng Long Angus (HK), Chen Long (Chn)
Group B: Kidambi Srikanth (Ind), Shi Yugi (Chn), Chou Tien Chen (Tpe), Viktor Axelsen (Den)
Women’s Singles
Group A: Akane Yamaguchi (Jpn), Pusarla Sindhu (Ind), Sayaka Sato (Jpn), He Bingjiao (Chn)
Group B: Tai Tzu Ying (Tpe), Sung Hi-hyun (Kor), Ratchanok Intanon (Tha), Chen Yufei (Chn)
Killing of Qassem Suleimani
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Infiniti QX80 specs
Engine: twin-turbocharged 3.5-liter V6
Power: 450hp
Torque: 700Nm
Price: From Dh450,000, Autograph model from Dh510,000
Available: Now
What is a Ponzi scheme?
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The biog
Favourite car: Ferrari
Likes the colour: Black
Best movie: Avatar
Academic qualifications: Bachelor’s degree in media production from the Higher Colleges of Technology and diploma in production from the New York Film Academy
Killing of Qassem Suleimani
UAE currency: the story behind the money in your pockets
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Brolliology: A History of the Umbrella in Life and Literature
By Marion Rankine
Melville House
Our legal consultant
Name: Dr Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Our legal columnist
Name: Yousef Al Bahar
Advocate at Al Bahar & Associate Advocates and Legal Consultants, established in 1994
Education: Mr Al Bahar was born in 1979 and graduated in 2008 from the Judicial Institute. He took after his father, who was one of the first Emirati lawyers
The specs: 2018 Volkswagen Teramont
Price, base / as tested Dh137,000 / Dh189,950
Engine 3.6-litre V6
Gearbox Eight-speed automatic
Power 280hp @ 6,200rpm
Torque 360Nm @ 2,750rpm
Fuel economy, combined 11.7L / 100km
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Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
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Ain Dubai in numbers
126: The length in metres of the legs supporting the structure
1 football pitch: The length of each permanent spoke is longer than a professional soccer pitch
16 A380 Airbuses: The equivalent weight of the wheel rim.
9,000 tonnes: The amount of steel used to construct the project.
5 tonnes: The weight of each permanent spoke that is holding the wheel rim in place
192: The amount of cable wires used to create the wheel. They measure a distance of 2,4000km in total, the equivalent of the distance between Dubai and Cairo.
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SPEC%20SHEET%3A%20APPLE%20M3%20MACBOOK%20AIR%20(13%22)
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Volvo ES90 Specs
Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)
Power: 333hp, 449hp, 680hp
Torque: 480Nm, 670Nm, 870Nm
On sale: Later in 2025 or early 2026, depending on region
Price: Exact regional pricing TBA
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.