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Smart Money Moves for a Financially Healthy 2020

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Planning to set your financial goals right at the beginning of the year is a great way to start in 2020.

Review your financial position, check where your money goes, review your debt, cut down on extra expenses and plan efficiently. This will help you stay on savings course and prevents you from getting into any money hurdles.

Here are a few ways to help you do that:

1: Revisit your mortgage loans.

Home loans are one of the biggest financial responsibilities that require regular revisits. Look for better options to save your money or get other benefits when there is a change in your financial situations, bank’s loan terms or interest rates.

Check if refinancing can help you save money. Compare your loan interest rates with the current rates because even half of a percentage point drop will give you substantial savings.

Lower interest rates help in reducing your mortgage term because here you can raise your monthly payments and prepare to clear the loan early. For example, paying off the loan in 10 years instead of 20 years offers great savings incentive to the homebuyer.

2.  Get a personal loan

A personal loan is a viable money-saving solution in many situations when you borrow it for the right reasons. With personal loans, you can settle higher interest loans, create a good credit score, pay off credit cards or consolidate debts with more manageable fixed EMIs.

For instance, when you want to consolidate debts on your different credit cards, taking a personal loan can help pay off all the charges in one monthly payment. You benefit from lower loan interest rate compared to the annual percentage rates (APRs) on your credit cards.

However, before taking a loan, calculate your repayment capacity using an online app, select repayment tenure that is within your reach and carefully review all the fine print.

3.  Select the right credit card

A properly selected card can help you make savings on purchases, but the choice of the card should be based on your use and habits.

For instance, a frequent traveler will make savings when his card offers discounts and rewards on air tickets, hotels or lounge access.

The choice of the card also depends on whether you carry a balance each month or pay off dues before time. When you take forward a balance on credit, select a card that has a low annual percentage rate (APR).

Knowing your credit scores always helps you to apply for a card that is more likely to get approved. Lastly, compare the annual savings you make on the card against the card’s annual fee to see if it is right for you.

4. Find a balance transfer scheme

A balance transfer can help you make substantial money savings. Transferring high-interest debt from credit cards or loan to a card with a lower interest rate gives saving on interest and helps in clearing off the debt faster.

However, check if any balance transfer fee is levied to carry the balance to your new card. Another critical factor is the new card APR rate; check the introductory APR offer and price after the promotional period ends.

Always evaluate the terms carefully and put a debt repayment plan in place. Remember your debt doesn’t disappear when you do a balance transfer, but effective planning can help make good money savings.

5. Work out your monthly budget

Make a note of your cash flows to curb all unnecessary spending. Different apps come as a handy tool to do all the calculations for you.

Feed-in your monthly income and your expenses and the app will give you a clear picture of how to plan yourself well.

These tools help you consolidate all your bills, track the spending pattern and get an alert message when the due date of any statement is nearby to avoid late fees. Money management is a vital step to rein spending and get finances under control.

6. Review your subscriptions

If you are a Netflix and Amazon Prime addict, ask yourself if you need all these subscriptions and if you have the time to watch them?

Most people pay more on subscribing too many services but hardly use that entertainment and reading channels they have.

It’s the time to evaluate the spare time you have at hand to use these services and the cost you are spending monthly on subscribing to these. This helps you track the service you can do without and make money savings.

Besides entertainment, your current telephone and mobile plan also needs to be reviewed. Check your bills to study your usage patterns. If you are not using the full service, try considering another package. And if you are paying extra after the service amount, see if you can sign up to a new scheme that serves best to your needs.

 

Transactor vs revolver – What’s Your Approach with Using Credit Cards?

Transactor or a Revolver – What’s Your Approach with Using Credit Cards?

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Plastic money is a popular and convenient way to pay for purchases. Credits cards and debits cards are often referred to as plastic money. Most people prefer them as they make transactions more convenient.

So whether you are purchasing a ticket to travel, shopping for groceries and everyday essentials, buying gadgets, clothing or other luxury treats, paying via a credit card is typically the first choice for most consumers. You can also order food, make purchases online, and book different transport needs effortlessly by using your preferred plastic card, thereby saving you a lot of time and energy.

If you are careful with your transactions, the use of a credit card makes your life hassle-free. However, if you make impulsive purchases beyond your means, using plastic money irresponsibly can put you into a vicious debt cycle.

So, what’s your style of using your credit card?

Do you use a credit card only for convenience? This means you never pay interest on the card and instead prefer to pay all dues on time. If that’s your approach, then the industry sees you as a “transactor” – a person who uses credit cards to make transactions easier and does not really utilize the “credit” facility offered by the card fully. Transactors enjoy benefits by accumulating points, miles and other rewards on their card transactions and hence effectively enjoy a “discount” on their purchases.

On the other side of the spectrum, many people use credit cards to make purchases without having enough funds to pay for them in full by the due date. Such users are known in industry parlance as “revolvers” as they “revolve” their balance outstanding across multiple billing statements.  “Revolvers” use credit cards to furnish today’s needs via tomorrow’s income. However, revolving your credit card balance can cost a lot of money in the form of interest, and this type of spending habits can severely strain your personal finances.

When does a revolving habit become risky for your financial life?

Banks typically give consumers a grace period of 21 to 30 days – the period between the end of the billing cycle and the payment due date. When you pay the outstanding amount in full before the due date, you won’t have to pay any interest.

For those who struggle to find the funds to clear their credit card balance each month, it’s easy to enter into a vicious cycle of debt.

When the payment is made after the due date, i.e. when you  “revolve” a balance, interest is calculated on an average daily balance method from the date you made the purchase.

If you continue to revolve a balance, there will be no grace period. You accrue daily interest on your balance outstanding and new purchases. So, your statement will then show substantial interest each month. In such a scenario, everything you purchase automatically becomes 30-40 per cent more expensive (depending on your particular card’s interest rate). This is a lousy buying strategy.

Moreover, for Personal loan seekers, this revolving balance can act as a disadvantage. It impacts your debt-to-income ratio (DTI) adversely, which in turn affects the credit score.

Revolvers that tend to accrue interest daily will have higher utilization rates and DTI ratios. The utilization rate and the percentage of the available credit you’re using are vital elements in determining a credit score.

For example, if your statement balance says Dh1,000, your credit report will indicate that you have a debt of Dh 1,000 that month. Now, if your credit card has a Dh1,000 credit limit, then the utilization rate here will be 100 per cent, even when you pay the bill in full.

So, here, to lower your utilization rate, you need to limit your purchases for the month or make payments early.

Whether you use the card and make payments as a revolver or transactor is not essential here. What you need to keep in mind is that for a better utilization rate, you must bring the total balance as low as possible and pay the remainder of the bill on time.

A higher DTI results in you paying extra money as extra interest charges in the long run (as these could impact your other loan interest rates in the future). Hence, a low DTI is vital for securing more favourable terms on a new loan or line of credit. It is also recommended you pay off all existing debts before submitting such a loan application.

The revolving habit overall imposes a high risk on your saving strategy and financial health. However, if you are revolving the balance at the time of an emergency, then carrying a balance for several months on a credit card is a better option to other even more expensive financing methods.

Even for other mindful larger purchases made with a credit card that is backed with a good plan to pay off the debt, it can be a wise decision. Remember, credit card companies will always prefer having revolvers because interest charged equals higher income for them. But, if you are looking for a robust financial situation, aim to be a transactor and always pay your credit card balance in full each month.

 

Six Ways Digital Banking Systems Transform People’s Lives

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Technology is changing the way we talk, dress and interact with each other, and it’s also changing the way we manage our money. With smartphones,  tablets, PCs and even smartwatches becoming a vital part of people’s daily lives these days, the desire to use one of these devices to access financial services conveniently has become commonplace.

A recent survey conducted by Oracle found that 60 percent of customers globally want to open a bank account online. Whether by need or by choice, customers want more digital options to access banks and manage their finances.

If you are unfamiliar with the nuances of digital banking, here are some basic pointers. “Digital banking” means digitization of traditional banking activities and services that have so far been available to customers only when they either physically visited a bank or contacted their bank’s customer service department over the phone.

These services usually include:

  • Money deposits and withdrawals
  • Transfer of funds
  • Checking and savings account management
  • Applying for financial products
  • Management of loans
  • Paying bills
So, is digital banking just a passing trend, or is it a  here to stay?

Innovations and technology have been driving the expansion of the banking business across the world over the past two decades.

Higher internet and mobile penetration even in remote corners of the world is helping establish deeper links between people and organizations. The preference for digital banking, therefore, is growing rapidly and is here to stay.

Here is how digital banking adds convenience to people’s lives:

 1. Saves time

Digital banking provides you with the luxury of banking from anywhere in the world and at any time. Online banking systems are available round the clock, with the exception of scheduled maintenance periods of the banks’ websites. These are necessary as banks use a host of technological solutions that require frequent upgrades to make your experience easy and fast.

Through online banking, you can check your account balance and transaction history, print account statements and balances. You can also pay bills, use direct debit services, order cheque books, transfer funds from (and to) your account and so on. All these online services can save you a lot of time and money.

2. Eases money planning

Digital banks have loan calculators, financial planning tools, investment solutions, budgeting apps, etc. to help in proper planning. They also support with tax matters, so customers can plan their finances without having to visit a bank physically.

3. Flexibility with payments

Say goodbye to carrying cash when you go shopping. Now mobile wallets (m-wallets), or virtual wallets are getting to be new trendsetters with more and more people using them. With banks going digital, it also gives you the flexibility of using digital wallets that lets you pay by using your smartphone.

It is a safe and easy way of conducting transactions. Digital wallets are paving the way for a cashless future, enabling customers to pay via mobile phones and thereby eliminating the use of cash.

4. Get real-time information

Digital banks use technology that helps notify you of account activities in real-time. So, you can be informed almost instantly of any activity that takes place in your account –credits, debits, charges, etc.. These messages can help to combat fraud and keep your finances secure.

5. Have a remote advisor

Some digital banks also provide you with a dedicated digital relationship manager for your service, so do not feel alienated due to technology. Your digital manager, even though working remotely, will take care of your banking needs around the clock. There are chatbots and robotic consultants, equipped with AI and online banking tools. However, as customers often like to speak to an actual person, striking an ideal balance is essential.

In many countries, digital banks are a huge help for start-ups and small-to-medium sized companies. They facilitate these organizations to carry out their day-to-day banking requirements through mobile apps, which gives them the flexibility of accessing a variety of services to help manage their business.

6. Provides secure solutions

As banks try and provide more seamless customer experience, there is the risk of fraud where millions of dollars could potentially be siphoned off within the blink of an eye. Customers demand convenience and efficiency, but they also seek state-of-the-art safety and security for their digital transactions.

Going forward, digital banks will need to partner with fintech companies to solve business problems and create new solutions. Such collaborations will help support the development of new products and guarantee a better acquisition of customers. AI and machine learning will be an essential part of the digital banking landscape, and so will comprehensive fraud management and cybersecurity tools.

Digital banks are leading a silent transformation in the banking sector for a more connected generation. As people continue to use a wide range of devices, the expectation of services from financial institutions is based increasingly more on the click of a button while being on the move. Digital banks are indeed ushering in a new era of banking with their ever-connected services

 

Top 4 tips to consider while looking for Personal Loans

Top 4 tips to consider while looking for Personal Loans

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UAE Residents have several options to finance purchases or to meet certain expenses. Savings is probably the best option to start with, but for those who are on tight budgets there are other options such as Credit Cards and Personal loans in Dubai, UAE.  While there are several other options which are mushrooming across the globe for instance, peer to peer lending and alternate finance, the most prominent and favoured one is the Personal loan which has several advantages over the rest. UAE banks offer personal loans up to AED 1 Million based on several qualifying factors.

Personal loans are generally preferred due to the following reasons:

  • Easy to avail – Simple and easy documentation. Most banks don’t even need a bank statement these days as they would be able to verify your salary details from your bank thorugh your IBAN, of course based on your authorization.
  • Short term generally – Payback period can generally be as short as 1 year
  • With or Without Salary transfer
  • No collateral required
  • Clear visibility on interest that one would end up paying for the entire loan availed.
This article primarily focuses on certain key aspects of personal loans that one should be aware of prior to signing on the dotted line-
1. Compare Personal Loans

It is important that one is aware of the various loans available in the market. UAE banks offer personal loans both with and without salary transfer. The ones without salary transfer, loans are offered on higher interest rate than the ones with a salary transfer. To compare loans, best places to refer are the comparison sites which are a one stop place to do research prior to signing up.

Make sure you do the math, refer to the interest rates, fees and processing charges. You can compare personal loans offered by UAE banks here

2. With or Without Salary Transfer?

It is always wise to take a personal loan with a salary transfer as the interest rates are as low as 5%. However, you will have to also check with your HR if they are fine in transferring salary to the bank of your choice. Normally, HR has a tie up with certain banks for processing salaries and the best place to start would be to identify the banks from your HR.

A salary transfer loan would need a letter from your HR in the format as specified by the bank. A personal loan without a salary transfer is recommended as a second loan or when someone is not eligible for a top up loan on their current salary transfer loan. This type of loan does not require a salary transfer letter from your HR but might need just a salary certificate.

3. Credit History dictates your loan interest rate or cost to borrow

Most of the banks in UAE have moved to a credit score / credit history-based interest rate. A high credit score would mean a lower interest rate.

Please refer to the article to learn about credit history and how to maintain a health credit score

4. Other eligibility criteria

Apart from credit bureau, banks also look at:

Work information: Employer, Designation, Years in Work, Fixed and Variable income

Debt Burden: Percentage of liabilities (financial obligations one owes on a monthly basis like Loan EMIs, minimum dues on credit cards etc.,) against total fixed salary.  The general condition is including the new loan EMI debt burden should be less than 50%.

Takeaway

Personal Loans are a convenient and popular method for purchasing products or services. Soulwallet recommends customers to make sure if there is a real need for a loan as any sort of debt must be avoided if possible. Having said that personal loans are also a simple and easy to avail with many banks in UAE moving to digital channels.

As a personal finance aggregator Soulwallet has analysed various personal loan features. For more details visit us on personal loan in UAE page.

 

 

When and How to dispute a Credit Card transaction ?

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Credit Card transactions may be disputed due to reasons such as inaccurate or excessive charge, billing error, fraudulent transaction or even a quality complaint on goods purchased. Banks allow customers to dispute credit card transactions either by a click of a button online or by filling up a form post speaking with a customer service officer.

It is important to note that the process of dispute normally involves a detailed investigation from the bank. One must make sure there is a valid reason before a transaction is disputed.

There are quite a few parties involved in a credit card transaction. Customer, Card Issuer ( Bank which issues the card), Merchant ( Establishment where the goods or service was purchased), Merchant bank ( the bank which the merchant uses to process these transactions), Association ( Mastercard, Visa etc., who are payment networks) and finally the Law.

In general credit card disputes fall under one of the below categories:

  1. Fraudulent transaction
  2. Inaccurate transaction amount
  3. Customer Complaint pertaining to the goods or service.

The later two categories may require a dispute to be raised within 60 days of the transaction.

Let us look at what you need to do in case of any of the above scenarios.

Fraudulent Transaction

Credit card fraud is unfortunately a reality. Banks spend millions of dollars in strengthening anti-fraud mechanisms and systems, however fraud still happens. There are several types of credit card fraud and these can be disputed by directly contacting the banks. Few things to do when you realize that there are credit card transactions on your statement or your alerts which you are unable to verify:

  1. Do not panic.
  2. Check with your family members or your supplementary credit card holders if anyone made these transactions.
  3. Try calling the merchant to check if the transaction is genuine. Do discuss with the merchant and ensure that the transaction does not pertain to you before you move further.
  4. Once you are sure that these transactions are not made by you, contact your card issuer / bank’s customer service team and report the issue and block the card. Note- most of the banks have a direct channel on the IVR (Interactive Voice Recognition) to report your card lost. You will be directed to a customer service officer instantly.
  5. Banks generally block the suspected compromised cards to ensure that there are no fraudulent transactions.
  6. You might be transferred to a specific trained Anti-Fraud management unit who will gather specifics from you and advice on the course of action.

 

Billing Error or Inaccurate Transaction

Charges which are inaccurate (excessive or incorrect) can be disputed by directly calling your credit card issuer. There are dispute forms which are required to be filled in on such scenarios. Banks are liable to keep the customer posted periodically on the status of the dispute investigation till closure.

Based on the type of transaction banks may offer temporary credit back to your credit card and once the dispute is resolved, the credit would be adjusted accordingly. In most of the scenarios, the card issuer is liable to resolve the issue within two billing cycles. However, note that the banks may take up to 180 days for a resolution.

Irrespective of the dispute being active or closed, one should continue making payment dues on your credit card during this period in order to avoid any negative credit bureau reporting. If the dispute is in your favour, banks will credit back the disputed amount.

Dissatisfied service or a related customer complaint

There are instances when a specific service or product that you purchased is not as per the sale commitment causing dissatisfaction to the consumer. These transactions can be disputed with the issuer. Below are the steps to follow on such instances:

  1. Always ensure that the first step is to reach out to the merchant and ask for a refund based on the dissonance caused. In quite a few situations, merchants do provide a refund or would be able to clarify the purchase clauses etc., You may want to document an email or a letter to the merchant on the dissatisfaction documenting the actual concern.
  2. If step one is failed and you failed to receive assistance from the merchant, contact your card issuer and request for a dispute to be raised for the transaction. Please ensure you have the following documentation handy: Original Invoice copies; Charge slips and the complaint letter.
  3. You may be required to fill in dispute forms as per the banks policies. Most of the banks have the forms available online which you can download and send to them.
  4. Do not delay any payments on your credit card while the dispute is in process. This will ensure that your credit bureau history is not affected adversely.

 

Soulwallet is a personal finance aggregator in the UAE. Soulwallet has analysed various credit card features and rated them based on an apple to apple comparison. For more details visit us on www.Soulwallet.com.

 

1 Simple Way to Relax in Luxury and Style Before You Board Your Next Flight

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UAE airports are always buzzing with traffic. The very make of the country’s population mix drives travel and in many cases frequent travel. So, let it be travel to home country, leisure tours or even business travel, there is a significant amount of travel residents undertake.

Gone are the days where one must wait near the crowded gates with limited access to essentials such as internet access or even a seat. Lounges are a boon to travelers, a place where they can relax with their families and have a nice meal or even work without any hassles.

Access to most of these lounges is free through business class tickets or memberships. Having said that there are options available for folks who travel in lesser space as well. After spending hours on saving money on the best possible rates for your flights and bookings, it does not really make sense to spend the saves on lounge. But wait! What if it is free? All the luxury and bliss at no cost.

Most of us carry credit cards and these cards in UAE offer airport lounge access free of cost. This is seen as a favourite and useful feature which gives absolute value to customers. It does not matter which airline one flies or even which class, the free lounge access feature is available on most of the credit cards.

This article elaborates on the Airport lounge feature and the different bands and respective benefits UAE credit cards offer.

What exactly do I get free with my credit card when it comes to Airport lounge access?

Free Access to Airport Lounge

Depending on the specific credit type that one may have, free access can be availed at Airport lounges. Airport lounge offers complimentary snacks, drinks, wi-fi and glossy magazines along with a peaceful place to relax before you board.

 Supplementary Card holders

If your family has supplementary cards, they can also avail the facility free of cost. It is important to note that not all card types allow supplementary cards holders. Do refer to the table below to identify which card allows supplementary card holders

 Guests

In addition to supplementary card holders, some of the credit cards allow guests accompanying primary card holders as well.

Number of visits

Some of these card types have a limitation on number of visits in a calendar year, post which the bank will apply a charge in case of any usage.

It is always wise to find out which airport lounge allows free access to the credit card you hold prior to your trip. This can save a lot of unnecessary walking within the terminals and most importantly disappointment at the lounge check in counters which sometimes can have a lengthy wait line.

 

Note: While the above is a standard offering from the associations (Visa and Mastercard), some banks might have customized the lounge offer on their respective cards. Hence it is advisable to refer to their product features section for more details click here.

 

Takeaway

Travel can be more enjoyable if planned well. While complimentary Airport lounge access offered by a credit card is a no-brainer one must be aware of all the other travel related benefits credit card offers. After all, why would one say no to a free feature which could be worth thousands of dirhams otherwise.

As a personal finance aggregator Soulwallet has analysed various credit card features and rated them based on an apple to apple comparison. Let it be Golf, Airport Transfers, Valet or even Cinema offers, one can easily refer to the ratings. For more details visit us on www.soulwallet.com.

Leave your worry behind and enjoy every bit of your travel. Bon voyage!

 

Travel Credit Cards – What are They and What Makes Them Unique?

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UAE residents are among the top 5 spenders on travel as mentioned in a recent study conducted by Visa. There are several reasons why travel expenses form a significant part of a UAE resident’s spend –  an expat population of over 80%, tax free salaries, attractive holiday packages, proximity to several international tourist destinations, kids studying abroad are a few.

Travel credit cards are normally associated with those that earn airmiles on spends. Emirates Skywards and Etihad Guest miles are the most popular airmiles programs in the UAE and are offered as rewards on several credit cards issued by UAE banks. “Travel” credit cards have evolved over the years from a simple airmiles offering to a multitude of benefits bundled together. Today, any cards that offer the below travel related features can be classified as travel credit cards:

Rewards: Cards that earn rewards in the form of airmiles or any other type of rewards which which can be redeemed against free flight tickets & upgrades, hotel bookings and upgrades, car rentals and so on.

Convenience: Cards that offer complimentary access to airport lounges, complimentary airport drops or pickups (some of the cards offer these in other countries as well), free “Meet and Greet” facilities and so on. These features can potentially save the cardholder over a thousand dirhams if used wisely.

Leisure benefits: Hotel discounts, international golf memberships, shopping offers in international locations (outlet village shopping in Europe for example) and so on.

Travel related co-branding: These are travel cards associated with popular travel partners such as booking.com cards, Marriott Bonvoy programs and so on.

A few important tips in choosing and using travel credit cards-

  1. Non-AED transaction rates: This is an important aspect one need to be aware of. Banks charge a fee for transactions incurred on credit cards in non-AED currencies and these charges typically vary anywhere between 2% to 3.9%. In many cases these charges alone would reduce the potential benefits that can be earned from using the card. It is recommended that one reads the fine print on fees and charges to ensure that the rates are clear and understood. The ADCB Traveller credit card is an example of one that does not have a charge for non-AED transactions which is a unique benefit offered to cardholders.
  2. Understand the finer details of the features and benefits offered:
    • Complimentary airport drop and pick up is a useful travel feature offered by many banks. This feature alone has the potential to save you hundreds of dirhams each year depending on how often you travel. However, there are differences in various aspects such as a) the number of transfers in a year b) whether intercity transfers are offered c) if there is a minimum spend requirement to avail the offer d) if the airline ticket needs to be booked on the same credit card and so on.
    • Complimentary Airport Lounge Access: While most of the credit cards in UAE limit the number of free visits in a year, there are a few credit cards which have unlimited access for the primary as well as the supplementary card holders. Some credit cards (Visa Infinite for example) offer free access not only for the card holder but also for a guest. There are also differences in the specific airports and lounges where the offer is applicable so it is advisable to check these details before your trip.

You can find a detailed rating of features such as airport transfers, valet service, cinema offers,  golf benefits etc. on Soulwallet. Click here  to find out more.

Takeaway

Whether you are travelling to exotic locations (the fjords in Norway or Mount Fuji in Japan anyone?) or even just back home to your family, an ideal travel credit card can not only make your trip more pleasant and seamless but also save you valuable dirhams at the same time.

Take advantage of Soulwallet’s credit card comparison platform to make sure you make an informed decision and – safe travels!

 

Good Credit Score Means Good Financial Health – Understanding How Credit Score Works can Help You Save Thousands of Dirhams

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Credit reports and scores are essential to financial health of any economy. Its primary use is to help financial institutions use the information provided in the report to assess the credit standing of an individual prior to issuing individuals any credit products (credit cards, personal loans and so on).

Al Etihad Credit Bureau is the entity which provides credit reports to consumers and financial institutions in the UAE.

As an individual it is beneficial to have a good credit score as this will not only ensure that your chances of getting a credit card or loan (personal loan, auto loan, home loan) etc. are increased but, almost more importantly can help you save money as banks frequently give better terms (lower interest rates, higher loan amounts etc.) to individuals with better credit scores.

In this article we will help you better understand credit reports.

Components of a Credit Report

Financial Liabilities – Financial institutions are required to provide details of credit facilities such as credit cards, personal loans, mortgage loans etc., to the UAE Credit Bureau. Details such as assigned credit limits, utilized limits on credit cards, payments made, delayed payments, returned/bounced checks, loan amounts issued, outstanding balances, age of the loan/credit card, active status, police case history and so on are some of the key data points shared. In addition, the below details are also shared with the credit bureau:

Employment Details: Employer Name, Income, Date of Employment are a few details pertaining to employment

Addresses: Residence address, emirate, contact details including mobile numbers and email ids.

Personal Identification – Emirates Id number, Passport Number, Date of Birth etc.,

The Al Etihad Credit Bureau (AECB) manages the process of collating the information received from all financial institutions (as well as some other non-financial entities such as telecom and utilities providers) and summarizing this at an individual customer level.

These details are structured in a systematic and easily readable format which the financial institutions can access in assessing the credit worthiness of potential customers.

What is a credit score and why is it important?

Credit score is a three- digit number which is assigned by the credit bureau based on various variables such as number of loans, repayments, delayed payments, credit utilization and so on. Credit scores range from 300 to 900, higher the better from a financial health perspective.

The credit score is an indicator of a customer’s financial profile and it is important to note that quite a few banks have moved to offer credit score-based features (interest rate, loan amounts etc.) to their customers. This means you will get more beneficial terms the higher your credit score .

So, what is the mantra to maintain a healthy credit score?

Below are some simple disciplined practices one needs to follow:

  • Do not hold too many credit cards. Find out the best credit cards for “You” and stick with it. Close the ones which are not suitable for you or you carry but don’t use too often. Use Soulwallet’s “Best Fit Credit Cards Tool” to find out how good your credit card isyou’re your individual spend patterns and other requirements.
  • Ensure payments are made on time. And whenever possible, in full. This is the most important aspect and has a significant weightage in one’s score. Missing payments is a huge no-no and will definitely adversely impact your credit score. Remember the golden rule – “only borrow what you can afford to repay”!
  • Avoid going over the credit limiton your credit card.
  • Try and stay below 40% of your credit utilization. If you have a credit limit of AED 10,000 and your current credit card balance outstanding is AED 4,000, your utilization rate is 40%. The lower the better.
  • Keep copies of your bank clearance letters for records, there are possibilities that one might have to provide them to have the details amended (if they still show up on the credit report).

Please note – credit scores are not carved in stone, it is a dynamic and ever-changing variable, updated periodically when inputs are received from banks and financial institutions.

Credit scores take a significant time and effort to improve and, in this case, we would clearly recommend that prevention is better than cure.

How and where can I get my credit report?

For individuals the best recommended option is to download the AECB (Al Etihad credit bureau) app on the mobile phone via Google play or the IOS App store and download the report or score. Note, the charges are much lower to download the report online rather than by visiting an AECB branch. Click here  to find more details.

Takeaway

Soulwallet strongly recommends you to compare products through a neutral and unbiased comparison site before you make a financial decision which can be as simple as signing up for a credit card in UAE.

Most UAE residents at some point or the other will need to explore options to avail credit facilities from a financial institution. The reasons could be as simple as managing to pay an annual school fee or to cover an unexpected medical expense. Having a good credit score can not only make the process of getting a loan much simpler but can also potentially help one save thousands of dirhams (a simple example is the money saved through a lower interest rate offered on your personal loan in UAE based on a good credit score).

How to Maximize Your Credit Card Rewards Earnings?

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Today’s consumers are inundated with a wide array of options for rewards credit cards. While this (almost) guarantees that you can find the perfect one for you, it also requires some research on your part to ensure that you are applying for a good fit.

One of the most significant reasons why people use credit cards is because of the potential rewards that they can earn. Most of the time, these rewards can be obtained through the same day-to-day purchases that you would already be making.

Read on to learn how you can maximize your credit card rewards earnings.

1. Compare credit cards

Before you decide on a credit card, make sure to utilize a credit card comparison site to ensure that you are selecting the right one for your needs and lifestyle. Different credit cards are created for different people, so if you want to maximize your credit card rewards earnings, it is essential that you find a card that is suited for you. If you are a frequent traveler, then you probably want to find a credit card that offers cash back or travel rewards as these are features that you will most likely be able to maximize.

When you utilize a credit card comparison site, you will be able to instantly discern the similarities and differences between the features and benefits of potential credit cards for which you qualify. For example, in the UAE, credit cards have a range of monthly salary requirements from AED 5,000 to premium  cards that necessitate a higher salary range.

2. Avoid high credit card fees

In order to maximize your credit card rewards earnings, you want to make sure you are avoiding high credit card fees. To do this, you need to make sure that you are prepared to use your credit card responsibly and pay off the bill each month – in full. If you pay your bill in full, on time, then you can avoid having to pay interest on each billing cycle.

If you are unable to pay off the bill in full one month, you still need to pay more than the minimum recommended amount. Otherwise, the credit card interest rates are going to increase significantly, and you are going to have to pay a lot more for your purchases. Keep in mind that late or missing payments can incur extra fees, such as penalties and late fees.

Also, take into account any annual fees, interest rates, balance transfer fees, and potential charges. All of these add up and need to be financed if you are going to receive any of the potential credit card rewards.

3. Consider flexible cards

Generally, travel and entertainment rewards cards are some of the most popular options (for obvious reasons). However, for some people, these cards can actually limit how rewards can be earned. What’s more, many of these credit cards place a cap on the number of rewards that you can collect. Therefore, it is highly recommended that you consider a flexible credit card.

Look for a credit card that permits you to earn cashback across a variety of categories that align with your purchasing habits. For example, the Citibank Cashback credit card includes all categories for earning cashback and offers excellent cashback on international purchases. Plus, unlike many other cards, this one has unlimited and automatic cashback. Other benefits include global airport lounge access, dining privileges and exclusive offers, travel inconvenience insurance, and supplementary cards.

4. Utilize digital tools

In this day and age, more and more banks offer digital tools that can significantly help you track your financial rewards, deals, and benefits. By opting for a credit card from a bank that provides online dashboards, you can efficiently see ways to maximize your rewards and the options for redeeming them. If you opt for a cash rewards card that has digital tools, then you can determine where you want to use your rewards.

What is more, if you are part of multiple rewards programs, then utilizing these digital tools can help you stay on top of it all. These digital tools grant you greater control over your finances. For example, you could choose an automatic redemption feature to make recurring contributions into your savings and investment accounts. This strategy helps you turn everyday spending into long-term financial success.

Final Thoughts

As there are so many credit cards available on the market, you must choose one that not only has the best offer, but also maximizes your credit card rewards earnings.

At SoulWallet, we pride ourselves in helping you find the best credit card for you. All that we require from you is that you tell us what you want, and then we will give you the options that you need. Together we make finding the right credit card easier, more convenient, and more rewarding.