Tag: credit card rewards

Terrible Credit Card Mistakes First-time Users Easily Make

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Credit cards allow users to pay for items or services in lieu of cash. However, a person should be responsible enough to understand that the card must not be considered free cash.

That is why, for some people,  without proper guidance, it is easy to end up in serious debt within a short span of time.

Here are six of the most common mistakes first-time credit card owners make when using their cards and what can be done to avoid them.

1.Believing credit isn’t important

In the real world, having good credit is vital. Credit scores allow an individual to apply for mortgages and save up on car insurance premiums.

Without excellent credit scores, you won’t have access to lower interest rates or premium credit card rewards. Even potential employers and the landlord of your future apartment might check up on your credit score to see your ability to pay your debts.

By managing your credit responsibly, future credit card and loan applications are approved more easily and you can gain access to better offers. You can also use your good standing to negotiate better interest rates on loans. Even credit cards with a limit of $5000 can help build your credit score.

So apply for a credit card early, but make sure to use it wisely.

2.Spending too much

Credit cards offer users the opportunity to buy or pay for products or services that may currently be out of financial reach. However, if you’re not aware of where your money goes and how much you spend on a monthly basis, you could quickly max out your cards and end up in crippling debt.

Live below your means. This is true regardless of whether you are still currently relying on your parents for financial support or working multiple jobs.

Create a budget to get an idea of your financial state. Make a list of your sources of income and your monthly expenses. There are apps that can make recording this information easier, although simple spreadsheets can work just as well.

Write a goal to motivate yourself to save, then create a financial plan for achieving your objective. It could be as simple as skipping Starbucks for a year or avoiding mall sales.

3.Paying only the minimum amount

If you have any outstanding payments on your credit card, do your best to pay these off as quickly as possible. Compound interest can easily bloat your small debt if you are not careful.

Say, you paid AED5,000 for a used car and paid for the purchase using your credit card. With an annual interest rate of 15 percent making the minimum payment AED150, it will take 173 months or more than 14 years to pay it off. At the end of this period, you would have paid over AED8,300 on interest rates alone.

That is more than your original debt if you think about it, so make an effort to eliminate your credit card debt as quickly as you can.

4.Missing payments

Not paying on time can be devastating to your credit score. It stays on your record for at least five years.

As much as possible, avoid buying anything that you cannot afford to pay in cash. By doing so, you avoid going over your budget and getting into credit card debt.

Find a way to make paying off your credit card debt automatic if you are the type who forgets. Perhaps you can open a bank account that automatically debits a certain amount to pay off your debt. This way, you won’t have to worry about forgetting your payments.

6.Lending your credit card

For some, having a credit card gives the holder a license to spend to its limits. You may be responsible with using your credit card, but you can’t say the same thing about your friend, girlfriend, boyfriend or significant other.

Treat your credit card as you would your bank account PIN: always keep it secured to yourself. Never let anybody else use it to avoid souring your relationship and ending up in bad debt.

Remember these common errors so you can avoid getting into trouble with your credit card company.

Are You Carrying the Right Credit Card in Your Wallet?

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Credit cards make life easier – boost our purchasing power and makes big-ticket purchases much easier. They offer financial convenience in times of an emergency and come with a range of different benefits.

Credit cards offer ease of transactions and can also become a source of savings when you choose the right ones and then use them the right way.

Here are three questions that will help you determine if the card you have works well for your particular needs.

1. Does your credit card loyalty program offer the best value to long standing customers?

Credit cards in the UAE offer several exciting features for new cardholders that usually are for a limited period only. Alluring signup bonuses, zero-interest periods, waived annual fees and many more schemes are available for new card applicants.

However, what rewards do these credit cards offer over the long term?  This is vital information that one should check before deciding on the most suitable credit card. This will also help you decide whether it’s worth sticking with your existing bank’s credit card or if you indeed need to change and would be better off with another option.

The rewards offered for signing up are one of the main reasons people switch credit cards frequently. Consumers usually change cards for the better rewards program and to take advantage of signup offers that last for a limited period only.

It is important that the credit card you have chosen offers you good value for both short term and long term as well. An attractive signup bonus offer, a 0% interest period, no annual fee for the first year, or high spending rewards and other such perks must be attractive and indeed competitive over the long term and not just during the initial signup offer period.

The whole package of benefits to suit your lifestyle and spending patterns must be balanced between immediate rewards and long-term value. Your credit card must be suitable for your everyday purchases and your typical spending patterns.

If you can continue to enjoy great benefits from your credit card over a long-term without incurring additional costs and with minimum efforts, then it is worth considering to keeping on with you.  But if the ongoing benefits are not appealing it is definitely worth looking out for a better option.

2. How well does your credit card rate for the features that you use most?

The credit card in your wallet must have the incentives suitable for your spending patterns and lifestyle. There are a set of distinctive perks available on different credit cards offered by various UAE banks.

Hence, begin analyzing your spending patterns by accessing your credit card statements. Note down expense categories on which you spend the most as this can help you identify the credit card that best rewards that type of spend.

For instance, frequent travelers would be better off having a credit card that offers rewards on airline tickets and hotel stays and benefits such as airport transfers and VIP lounge access. Such credit cards typically have an annual fee component but frequent travelers generally gain back the value from the perks and rewards offered.

There are also credit cards with travel benefits that fit the needs of travelers looking for best deals, such as discounts on travel, dining and hotel stay along with the flexibility in reward redemption.

If you use your car a lot then it would be advisable to check for credit cards that offer fuel discounts, gas credits or rewards features on amounts spent at gas stations.

If you love playing golf – an expensive hobby to keep up, owning a credit card that has exclusive privileges on golf like a free tee-time once or twice every month at selected locations can be a good choice. Movie lovers will benefit if their credit card offers them a buy-one-get-one cinema ticket or similar movie discounts. When eating out is a weekly habit for you, dining discounts and perks on the card is a must.

For those who live a simpler life and spend only on basic necessities, cards offering cashback or rewards on groceries and other retail expenses can be the most rewarding. Hence, do review your regular expenses to choose a credit card that best rewards your lifestyle.

3. Is the type of credit card you carry, giving you the right value-based your lifestyle?

Credit card operators offer perks to customers differentiating their value-added services such as cashback, miles or rewards programs. When looking for real value on your credit card, it’s vital to match the type of card perks with your spending needs.

Cashback cards help cardholders get a percentage of their spend back on specific expense types incurred on the card. If you are a frequent credit card user then even a small percentage rebate can help you save money. Cashback earned is usually directly credited to your credit card account as money back.

Cashback on a flat-rate credit cards typically pay anywhere between 0.75% to 1.25% for all purchases whereas tiered and bonus-category credit cards give higher cashback rates at selected merchants or on certain types of purchases (groceries, school fees, fuel etc.) but with a nominal (usually 0.25% to 1%) reward on all other purchases.

So if you prefer some extra money in your pocket than other rewards, a cashback credit card could be the answer. However, do keep in mind that even cashback offers come with their own terms and conditions – prominent ones being a minimum spend requirement and maximum possible cashback restrictions (or caps).

For travel enthusiasts credit cards that offers air miles as a reward could be a better option. These cards provide higher miles on travel purchases and international spending made via the credit card.

It is true that joining bonuses are often the most attractive reasons to apply for a new credit card. However, in the following years, you’ll need to spend more to gain attractive rewards, especially if the card has an annual fee.

When redeeming miles, also note that there could be blackout dates, airline restrictions, or booking instructions that you will have to consider. Reward points offered on credit cards in the UAE are very diverse. You can accumulate reward points against spend and then redeem these points for various items – shopping vouchers, gifts, and even air miles. However, similar to cashback, these rewards credit cards also sometimes have an expenditure cap attached to them.

 

As is most often the case, there is no perfect credit card for everyone. But there could be definitely a perfect credit card best suited to your individual purchase patterns and benefit preferences. Taking that little extra effort to “align” yourself to the best credit card for ‘you’ can not only help maximize your savings but also provide you with meaningful benefits to enjoy.

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!

 

5 Smart ways to make your credit card work for you

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UAE certainly has the highest credit card, internet and e-commerce penetration in the MENA region. However, a significant percentage of transactions are still made through cash. Visa and Mastercards are popular and are widely accepted by merchants in the region.

There have been several changes in recent years, which are moving the needle on credit card usage in the market. Some customers would have witnessed their credit cards being reissued by the issuers with a chip around 2016/17. This was due to a mandate from the Central bank of UAE for the issuers to comply with EMV (Europay, Mastercard and Visa global standard for chip-secured credit cards) standards a few years ago.

Credit cards are extremely convenient, secure and what’s more also reward cardholders on usage as well. There are more than 200 credit cards issued by banks and financial institutions in the UAE. While the number of banks is shrinking with the recent M&A announcements, there are several new credit cards which keep popping up with innovative and irresistible offers to the customer.

Many of us would have had a difficult experience with our first credit card. Not understanding differences between a credit or debit card, we would likely have dashed to the nearest ATM to withdraw some cash and spend on stuff which we really did not have any plans of buying. A scenario which would most likely have ended finally with some sort of settlement with the bank after weeks and perhaps months of painful collections calls and negotiations.

As we got a little more aware of how credit cards work, we generally end up with one or two cards (ideally issued to us by the banks where our salary gets credited) and have built some sort of loyalty to these cards over the years.

This article gives a credit card user 5 useful tips on how to use a credit card and maximize savings. These are simple and proven steps which can help one save thousands of dirhams:

  1. No one Credit Card is best suited for everyone

Credit cards are diverse in their offerings. One must understand that 200+ credit cards in the market come with several differences. Some of them being:

Fees and Charges: Annual Fees, Interest rates, International transaction charges, cash advance charges and so on.

Reward Features: Cashback, Airmiles, Reward Points, No Rewards no fee, Reward earn rates, Redemption or burn rate etc., Note- The value of the rewards might vary based on spend amounts, type, location etc.,

Features: Airport Lounge, Free Cinema, Complimentary Golf, Valet Offers etc.,

 

Apart from the above there are also credit limits, co brands (Skywards, Etihad and so on) etc., which differentiate cards.

With so many differences among them it is important to spend a few minutes to compare the features and identify the most suitable credit card for your specific needs.

Soulwallet’s  “Best Fit”  comparison tool uses smart algorithms that can match one’s individual spend pattern and feature preferences with the most suitable credit cards among all options available.

One will also get a good indication of annual saves in dirhams earned through credit card rewards. Do check how your current credit cards stack up against the ones which are best for you. Click here to find out.

Also, do look at the feature wise rankings to find out which is the best card for your favourite credit card feature (Cinema, Golf etc.,)

 

  1. No one Credit Card can give you the best value

Why do banks have multiple credit cards under their offering? These are typically to cater to different segments of customers who are keen on a specific feature or a reward program. Cashback and Airmiles are couple of popular reward categories.

After evaluating credit cards in the UAE and the reward offering across their products, it is quite evident that there is no one card which may fit in the best for you. In order to optimize your savings (reward value for the transactions you make on the credit card), you probably might have to keep 2 or 3 credit cards in your wallet which satisfy all your requirements with a high rating.

For example, John travels frequently. He spends his weekends generally watching movies with his wife and two school going children. The best option for John is to look at the below combinations:

Credit cards that:

  • Reward him with maximum reward rates for a) School Fees b) Grocery expenses c) Travel spends
  • Includes complimentary features such as a) Cinema Offer b) Airport Lounge c) Airport Transfer
  • Has low international (foreign currency) transaction charges.

The answer might be more than 1 card and if the saves are significant, why not?

 

  1. Pay on time and if possible, in full

Making payments on time is probably the most important criteria which helps build one’s credit score. Having a healthy credit score means keeping your credit options available. There is always going to be a need for some sort of credit requirement, for example a home loan, salary transfer loan and so on. Find out more on Credit scores in the UAE.

Making your credit card payments on time is extremely critical and if possible, try to make them in full. This means one would save money on interest which can be in thousands of dirhams.

Most banks have options such as Standing Instructions (from your bank account to your credit card if both are with the same bank), Direct Debit (a standard transfer instruction on your bank account), exchange house payments etc. One has an option of setting this up for a minimum payment or full and sometimes a fixed recurring amount as well. Enquire with your bank and set up a payment instruction which will ensure you don’t miss a payment date.

Regular payments build one’s credit history well and allows banks to re-underwrite your credit lines periodically and automatically.

 

  1. Balance Transfer – If you are incurring interest by not paying your credit card dues in full each month

Balance transfer in simple terms is moving debt from one credit card to another. If you are not paying the total outstanding and incurring interest on your statement balance, a balance transfer is a smart and easy method to save money on interest.

Balance transfers normally come with an interest free offer period. This is a no brainer – it can help you save interest that you would otherwise end up paying on your current card for 3 to 12 months (and more in most cases), depending on the balance transfer offer period.

Example: If a cardholder has an AED 5,000 balance on a credit card with a 20% interest rate. Such a balance would incur an interest of approximately AED 1,000 in a year. By transferring his credit card balance the card holder can save on the AED1,000 of interest with only a small balance transfer fee instead.

Note:

  • Balance transfer does not earn you rewards on transferred debt.
  • Once you have transferred your balance to a low interest card, do review the need of continuing to keep the high interest credit card active. Any unnecessary spend on this open credit card can delay your payoff on the new card.
  • Defaulting on the new credit card might trigger standard or higher interest rate as per banks policies.
  • Before you make the balance transfer move, do the math to ensure that you end up saving. Points to consider are Annual fees, Interest rates etc.,

 

  1. Change with the industry- Adapt to smarter payment methods

In recent years, banks have evolved and are continuously evolving in the digital space to stay updated and relevant to the future customers. Smart payment methods have gained a lot of momentum and acceptance among UAE consumers.  Apple pay, Samsung pay are already common names and are quite popular.

These smart payments make the process seamless and are focused primarily on convenience and security.  While Apple and Samsung are already building the culture of adapting and shifting to newer technologies in the mobile space, one must be more adaptive and embrace future technologies to leverage upon the benefits available.

 

Takeaway

Credit cards are convenient and a popular payment method for purchasing products or services. While it is quite a privilege to flash a prestigious credit card from your wallet for a purchase, it is important to make sure that the credit card works best for you..

As a personal finance aggregator Soulwallet has analysed various credit card features and rated them to identify the best credit cards for each feature.. Be it golf offers, complimentary airport transfers, valet services or even cinema offers, one can easily find the best credit cards with the ratings provided. For more details visit us www.Soulwallet.com.

 

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.