A standard UAE household's monthly expenses come in the form of groceries, fuel, education, utility bills, travel, online shopping, subscriptions, and dining. But since the costs vary as per the person, choosing a credit card that rewards only one expense can be limiting.
So before applying for a credit card in UAE, check whether it matches your spending pattern and repayment habits. Also look at its fees and reward structure.
Map Your Monthly Spendings
Lay out your monthly spending into broad categories, including:
• Groceries and supermarkets
• Dining and food delivery
• Online shopping
• School or education expenses
• Fuel and transport
• Utility and telecom bills
• Travel and hotel bookings
• Subscriptions and recurring payments
This categorisation helps you choose a card that best matches your regular spending. For example, someone spending AED 4,000 per month on groceries, utilities, fuel, dining, and online shopping may benefit from a balanced rewards credit card rather than a card with excellent rewards in just one category.
Identify the Major Spending Categories
Since you have multiple monthly expenses, review the monthly bank statements for the last 3 months and identify and group your largest expenses. They could be:
• Regular visits to hypermarkets like Carrefour, Spinneys, or LuLu taking up a major part of your household expenses: Look for a card with higher cashback on supermarket spends
• Monthly payments for DEWA or SEWA, Etisalat, and du phone/internet bills hold a large portion of your monthly expenses: Cards that offer direct cashback on utility and telecom bills
• Commutation or school runs that need regular fuel refills at ADNOC or ENOC fuel stations: Credit cards with fuel as a dedicated reward/cashback category
• Tuition fees that usually are the largest seasonal or monthly expense that impacts your household expenses: Special cards with savings or reward points on education payments
• e-Commerce purchases from platforms like Noon or Amazon UAE adding up fast: Cashback credit cards with rewards on online shopping
If your lifestyle includes frequent flights, you can also pick a travel credit card that collects Emirates Skywards or Etihad Guest miles and offers exceptional travel rewards.
Compare the Reward Structure, Not Just Promotional Offers
Analyse the permanent reward structure over dynamic promotional offers like a high initial Welcome Bonus that are designed to attract customers. The reward structures help you understand the amount you earn in a year or 2, and every regular utility or grocery payment after a promotion ends.
Calculate the long-term value by estimating your actual annual spending in every category and applying this permanent earn rate.
Check Which Transactions are Excluded
There are terms and conditions to cashback or reward points on "all spending". There's always a list of excluded transactions where banks earn little to no interchange fee from merchants, so they often have no rewards on them. These categories include:
1. Government services
2. Utility bill payments
3. Real estate and rent payments
4. Education and school fees
5. Charity and non-profit organisations
6. Insurance payments
7. Balance transfer
8. Cash advances
9. Certain wallet or quasi-cash transactions
Note: These exclusions are not universal. The eligibility varies by bank and card. Always check the latest terms and conditions before applying.
Pay Attention to Annual Fees and Other Charges
Annual fees and hidden charges can erase any rewards or cashback you earn. If you spend less than the break-even mark, a no-annual-fee credit card or a free-for-life credit card is a better choice.
Go Beyond Cashback and Rewards
Look past simple cashback and air miles. Check out additional benefits like:
• Protection & Insurance: You get travel medical insurance, purchase protection, and credit shield insurance.
• Lifestyle & Convenience Access: Many cards offer benefits such as airport lounge access, subscriptions and entertainment offers, and valet parking facilities.
• Financial Flexibility: Enjoy financial flexibility with perks like 0% easy payment plans and balance transfers.
Align Card to Repayment Habits
The right credit card should also depend on your ability to clear the monthly balance. To maximise returns on your multiple monthly expenses, map out where your money goes before selecting a card.
• If you pay the full statement balance every month, you will receive the full value of your rewards and benefits since there is no interest.
• If you regularly carry a balance, interest and hidden charges will outweigh rewards. This makes the interest rate and repayment more prominent than the reward you earn.
Use Simple Comparison Platforms before Applying
When you have multiple expenses to cater to, comparing credit cards can also be difficult across different bank websites and branches. This is where a comparison platform can be helpful. The right site can offer all the relevant information about multiple cards from different banks in one place.
You can use platforms like Paisabazaar.ae. It makes your research easier and helps you compare features, fees, and eligibility of different cards.
Don't Choose a Card Only for One Expense
Even if a credit card offers attractive rewards on a particular expense, it may not be the best option for you. Rather, see how much you spend on that category and compare it with your other expenses before deciding.
The idea is to check the total monthly value rather than only isolated rewards. Look into the combined impact of cashback or points, spending caps, fees, exclusions, and additional benefits before choosing a card.
To Conclude
No single credit card is ideal for every consumer in the UAE with multiple expenses. The right choice depends on how you spend, which transactions qualify for rewards, fees, and the benefits you can actually use. Also, know how comfortably you can repay the credit card balance.
Look beyond the rewards and understand the card's overall value against your spending pattern. For clarity, quick comparisons on platforms like Paisabazaar.ae can help you make an informed decision.
