6 Things You Should Avoid Buying On Credit Card In UAE Dubai
Swiping your credit card left and right without giving little thought to the kind of purchase can land you in lot of trouble. It is convenient to pull out your credit card from your wallet but certain purchases need to be left off of your credit card.
Refrain From Using Your Credit Card For Following:
#1. Cash Advances:
One of the easiest and most convenient ways to secure finance is through cash advance on your credit card. You can withdraw a certain percentage of your credit limit and credit card companies do encourage you to take card advances. But before you decide on a cash advance against your credit card, give it a second thought. Your credit card company will charge you a cash advance fee, there is no free credit period- your interest meter starts running immediately, the interest on cash advance can be higher than you normal interest rate and most of all, failure to repay this advance can trigger penalties and other charges and also increase in your interest rate. So it is better not to take cash advances on your credit card.
#2. College Tuition Fees
As far as I know, the college tuition fees are pretty high in UAE and using a credit card to pay off that tuition fee can take a toll on your finances, provided you fail to repay that amount within the free period. The colleges might charge a convenient fee as well. You will be better off taking a low interest student loan or applying for scholarship.
#3. Medical Expenses
In UAE, most of the residents have medical insurance and the medial expenses are borne by companies. But if your company doesn’t provide you medical insurance or if it covers only certain kinds of ailments, there are chances you need to pay your medical bill, fully or partly. In such cases, avoid using your credit card. Imagine you paying interest on medical bills for years to come.
#4. Down Payments
If you don’t have cash to pay for down payments of any kind, then its simple to understand that you cannot afford it. Making a down payment with your credit card can put you in a credit card debt spiral. You will be not only paying interest on your installments of whatever that you are buying but also interest on your outstanding credit card balance. So if you can’t afford it, don’t buy it.
#5. Traffic Fines
I don’t know whether they allow the usage of credit cards to traffic fines in UAE. If they allow, it is better to refrain from using your credit card. A small fine is still acceptable but heavy traffic fines paid with your credit card can indicate recklessness and also indiscipline. Credit card companies might raise a red flag if they see such behavior to be detrimental to their interests.
#6. Groceries And Daily Usage Items
According to me, if you are in the habit of carrying a credit card balance month on month, then you are better off keeping these expenses off your credit card. Imagine you paying interest on those grocery items for months to come.