How to Make Credit Cards and Debit Cards Work for You

How to Make Credit Cards and Debit Cards Work for You

14 Jan 2014

Use the plastic to manage your budgets and indulge every now and then!

Debit or Credit?
Some have mastered the art of plastic.  We’re talking about debit and credit card use, of course.  Some ladies have figured out the hidden fees, read the fine print, and learned how much to pay each month to avoid falling into debt.  For others, using a card for anything other than withdrawing cash can be intimidating.  (What’s an APR again?...). Chances are, you’ve got some plastic in your wallet that has come in handy – especially when booking holidays with friends or indulging in a little retail therapy. If you’re able to plan and budget well, you can make credit and debit cards work for you and really improve your financial stability.  VIVA talks to some savvy ladies about how to make the best use out of debit and credit cards.

Take the Credit
Mariam Danielyan, who lived in the U.S. for many years before moving to Dubai, is amused by the fact that many people here don’t actually use credit cards.  In the west, credit cards are important to build a good credit score that can allow you to apply for home or business loans, whereas that concept does not exist in the Arab world.  In fact, quite the opposite is true here: website, which promotes saving in the U.A.E., finds that credit cards don’t have a very good reputation in the Middle East.  Many people here have the perception that credit cards can actually get you into financial trouble or mired in debt, according to a survey by  

Still, credit cards can be an essential way to manage budgets.  Mariam, for example, continues to use them in the U.A.E. even though she happily lives within her means with her current salary at a law firm.  She has two credit cards that she uses regularly even though she could choose to use a debit card or rely on her salary.

“It’s just about knowing that it’s there, so that if a big commission is coming next month, but I need to go on holiday or buy an expensive item this month, I can budget properly,” says Mariam, who does legal work.  “It’s not something I use for everyday things like groceries or gas.”

And let’s not forget one of the biggest perks of using credit cards: racking up coveted air miles.  Partnerships between credit card companies and airlines, for example, Emirates NBD and Emirates Skywards, can help get you upgrades or even free trips if you get enough air miles on your credit card.

The concept dates back to the early 1990’s, when airlines in the U.S. sold miles to credit card providers, hotels and car rental agencies to motivate clients.  According to, an American named David Philips actually bought 12,000 yoghurt cups, costing $3,140, that he calculated would land him enough air miles to travel to Australia and back more than 150 times. The value of actual flights would’ve cost over $150,000.

It’s important to check different credit card schemes. For example, Abu Dhabi Islamic Bank has a platinum visa card that provides 50,000 Etihad air miles and a free companion ticket just for signing up. Other perks include free access to lounges in Dubai and Abu Dhabi airports and even free valet services. Websites like are great for comparing different credit card rates and perks.

Here are some tips on the do’s and don’t of credit card use:

Use it for everyday buys, like food or clothes. Using a credit card in place of cash means that you’re paying interest back on everyday items, which quickly adds up.  Or, it means that you’re paying a minimum amount at the end of each month, meaning it takes longer to fully pay off the debt.  This is what can lead to trouble.  Save the plastic for big or important purchases – treat it like a loan, because essentially, that’s what a credit card is when it comes to use.
Pay more than the minimum at the end of each month. This will shorten the amount of time you need to fully pay back the debt.

●   Identify the difference between what you need and what you want. Resist that temptation. “I want Jimmy Choo’s and Louboutins, but I don’t NEED them right now,” says Mariam.  “Plus, it makes what I do currently own special!”
Find out about credit limits and don’t go over them. If you’re allowed to borrow 20 percent more than your salary, don’t overextend. Live within your means and be realistic about your payback schedule.
Do your research. Different banks issue cards with varying interest rates.  It’s worth it to spend some time finding a card that suits your payment schedule needs.
Pay your bills on time. That way you’ll avoid headaches and fees for late payments. “If you plan your usage in advance and keep track of what you spend, this should be straightforward,” says Lama Kabbani, a spokesperson for Visa in the Middle East, according to  “In this way, you will save yourself the risk of interest charges building up.”

Debit This
Debit cards are usually used in place of cash.  It is a direct link to your bank account, so that swiping the card at the cash register means money is taken out of your account on the spot.  This is great to use if you don’t like carrying a lot of cash on you and you know the places you go will accept debit cards.  
Alternatively, some debit cards are pre-paid, so you can “load” a specific amount onto the card, which helps you keep track of exactly how much you are spending.  For example, you can put Dhs 2,000 on the card and plan to use exactly that amount for the week – this helps you budget and save money.  It also helps you keep track when you travel so you don’t need to calculate foreign currencies when you’re shopping in exotic locations.
“It just requires a little bit of planning and budgeting properly,” says Nima Abu-Wardeh, founder of personal finance website  “It’s completely do-able, though, and whatever you do today will really help the future you down the line.”

Here are some Do’s and Don’ts for debit cards:

Avoid using it in public Wi-Fi hot spots.  These areas are easier for hackers to sneak into your account.  Within hours, you’ll find that you’re getting billed for zebra-framed sunglasses at an online store registered in Zimbabwe.
Dining out. You’re giving your card to a waitress who disappears with it for 5 minutes before coming back.  Who’s to say that someone isn’t looking over her shoulder as she swipes it and manages to get all the info needed?  Might sound far-fetched, but it happens all the time.  “After a night out at a trendy restaurant in the DIFC, I got home and found 15 texts saying that my debit card was used for 15 online purchases from websites registered all around the world, all within the half hour that it took me to drive home,” says Mariam.  “I’m lucky I get these SMS alerts, because I called the bank to block my card straight away.  They had spent over Dhs 5,000 and while the bank did pay me back, it took about two months.”
Avoid using it for automatic payments.  If you register your debit card to make automatic payments for your phone or gym bill, you won’t notice if the fees are suddenly doubled by year end and the money’s just been streaming out of your account.  Always monitor your statements.

Use it when travelling, as it’s safer than carrying a wad of cash around like you’re Paris Hilton.  Even if you get mugged, you’ll be able to immediately block your card and avoid theft.
Debit cards are great for smaller itemsike your Spinney’s run or a gym membership.

Happy shopping!
Prateek Vahie, head of card products at Emirates NBD, shares tips to help you be money smart.

What are the benefits to using a credit card?
Key benefits provide convenience, security and rewards.  You don’t have to carry cash around.  You can track expenses clearly.  The chip on card provides added security. The free credit period lets customers have extended period to pay back (55 days). Rewards across products, so depending on kind of customer, can choose from cash back, miles, and travel points.

What are ways to avoid racking up debt?
With our cards, every customer gets a transaction alert.  So helps you keep track. Can also go online and check all the transactions made in a given month.  Also, always pay on time.

What do most people use credit cards for most – shopping, travel?
Electronics is a big one, like plasma screen TV’s.  Travel, jewellery, and clothes – generally expensive items, are also popular.

What are some cool features of Emirates NBD credit cards?|
We’ve got a mobile app for iPhones to help people find where they can get discounts or how many air miles on Skywards they’ve racked up.  Like it will find a restaurant based on your geolocation so you can find the one that will give you the best deal if you use your card.  It’s pretty amazing!

So how about debit cards, what are they good for as opposed to cash or credit cards?
The biggest advantage is that you’re paying off everything at the time of purchase, so people are happy not to have a bill with a big amount due at the end of the month.  You can also get many of the same discounts at retailers that you can with our credit cards.

What do people use debit cards for most?
Day-to-day purchases, like grocery shopping or metro cards.

When’s a bad time to use them?
Be careful when supplying any card information online, especially debit cards, because it’s basically direct access to your account.  Always use trusted websites!

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