The Debt Panel: Unemployed real estate agent blames his Dh50,000 debt on UAE banks luring him in with 'dreams'

The Dubai resident says he built up the debt on five credit cards paying for his sister's wedding and being missold products by banks

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I have five credit cards with a total outstanding balance of Dh47,500. I have missed a few payments recently as I lost my job in real estate. The debts are:

Credit card 1: Dh12,500

Credit card 2: Dh10,000

Credit card 3: Dh7,500

Credit card 4: Dh 7,500

Credit card 5: Dh10,000

I took out credit cards one and two, which are more than two years old, after being lured in by the dreams that banks show clients. But once I signed up for the cards, they were used up quickly. I took out credit cards three and four (which are both from the same bank) 15 months ago to pay for my sister's marriage. I signed up for the last credit card about eight months ago; I didn't want it but the bank promised me a Dh15,000 limit that would help me close the previous two cards. Unfortunately the limit was only Dh10,000 and it got consumed as usual unfortunately. My monthly expenses come to about Dh3,500 and I have a car with a monthly repayment of Dh867, which I am making on time.  I have been in the UAE for almost four years and am originally from Pakistan. What should I do? ST, Dubai 

Debt panellist 1: Kunal Malani, head of customer value management, UAE & MENA at HSBC Bank Middle East

It is important you understand and acknowledge the underlying issue, and make a promise with yourself to resolve this once and for all. While credit cards may have been offered to you, it was unwise to take the credit and then use it up “quickly” as you put it.

Assuming that you have now found a new job in the UAE, I suggest you reach out to one of the banks with whom you have a relationship - ideally the one into which your salary gets paid or the one you have been making on time car loan repayments to - and explore options for debt consolidation. The interest rate on cards is typically higher than that on loans and so one option your bank may offer is to take one loan out and use the money to pay off all your cards. For example a Dh50,000 loan to pay off your card debit, over 36 months would roughly carry an Equated Monthly Installment (EMI) of under Dh1,800 a month. Whereas just making the minimum payment of 5 per cent on your credit card debt Dh47,500 will cost Dh2,350 a month initially and it will take you years (more than 10) to pay it all off.

Most importantly, since it is clear that you have the tendency to spend uncontrollably on your credit cards – you should consider cancelling your cards as soon as you pay them off with the money from your personal loan. This may even be a condition by your bank for granting you the debt consolidation loan.


Read more from The Debt Panel:

The Debt Panel: Abu Dhabi resident 'shocked' after bank demands Dh44,000 for a debt she cleared three years ago


Debt panellist 2: Michael Routledge, the founder of the debt advice site

It is always difficult to make payments when you are unemployed and have no source of regular income. I assume that you are still not working, and if this is the case I would suggest speaking to your creditors and letting them know your current situation. Ignoring the issue and not alerting them will only make matters worse. Bad news never gets better with time. You may find that some, if not all of your creditors, will be willing to free the interest on your accounts until such time as you can afford to make repayments again.

Too often, we see people getting themselves into debt to pay for celebrations for their family members. While this is an admirable thing to do for your family, it often results in unmanageable debt, which could have been avoided by saving for the event, rather than using credit tools from lenders.

With the above said, you are where you are, so there’s no use worrying about the past.

Once you are working again and have the ability to pay your debts, the general rule you should follow is to pay the cards with the highest rate of interest first, not necessarily the highest debt value. This method ensures that you pay the minimum amount of interest possible.

You can download some debt management tools free of charge from my site to help you have a clear view of your income and expenditure to your creditors. I always advise debtors to be open and honest with those that have lent them money; not being so leads to worse problems further down the line.


Read more from The Debt Panel:

The Debt Panel: Former businessman with Dh470,000 liabilities is running up Dh20,000 in new debt every month


Debt panellist 3: Ambareen Musa, founder and chief executive of

Losing your job is never easy. It throws off all your plans but it is something that can happen to any of us, which why it is important to be prepared for it. Before someone asks how to resolve a situation like this, they need to have a mindset that wants to get this sorted and be ready to make the sacrifices required.  That means no more unnecessary expenses.

First of all, look at your income. Even if you don't have a job, are there other sources of income? If so, write it down. Then write down all your outstanding payments per month. Before you factor in your lifestyle expenses, put the funds you require to pay all your debt to one side.  Then see how much you are left with and try and live as basic a lifestyle as possible to ensure you a fresh start.  Without doing this, your debt situation will only spiral further out of control.

Ideally, you want to pay off the most expensive credit card first. Then try and have your bank unify all your credit card debts into one.  Check out any balance transfer options with the same bank so you only have one repayment to think about. Some banks have balance transfer offers for three, six or 12 months with no interest, which can potentially give you a break on the interest side.

Another option is to consolidate all your credit cards debts into a personal loan. This will give you a lower cost debt than credit cards. Again, depending on your credit report, you may be able to get a personal loan from your own bank or from another institution once you have a job.

Finding a new job as soon as possible, whatever this may be, to give yourself an income is key. Even if the role is not entirely what you want, it will act as a stop gap while you ease yourself out of debt.

I spoke about willpower earlier on.  From what I understand you took the last credit card, with a limit of Dh10,000, but you did not pay off your other debt with it instead choosing to spend on expenses.  Again, it is critical to relook at your lifestyle expenses for any debt repayment plan to work. It is time to back to the basics until you have your finances back in order

On this panel this week: Kunal Malani, head of customer value management, UAE & MENA at HSBC Bank Middle East; Michael Routledge, the founder of the debt advice site and Ambareen Musa, founder and chief executive of

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