NBAD eDirham Prepaid Card-A Guide For UAE Residents
Prepaid cards confer all the benefits of a normal credit card and that too without the risk of going into credit card debt. Whether it is online purchase or in person, prepaid cards never allow you to spend more than what you have.
So, what is a prepaid card?
Prepaid credit card is a card issued by a financial institution like a bank and it is already loaded with funds. This prepaid card can be used like a normal credit card. The major difference between a normal credit card and a prepaid credit card is that with the former, you make purchase with borrowed funds but with latter, you have already paid for the purchases that you make.
In a country like United Arab Emirates (UAE), which offers best of luxuries and life opportunities, it is easy to let lose financial discipline. So if you are entering the real-money-world or if you lack financial discipline, it is better to start with a prepaid credit card. It is better suited for students too. It can teach you a thing or two about money management and also will teach you to stretch you finances within affordable limits.
If you are an UAE resident and are looking for a prepaid card, then National Bank of Abu Dhabi’s (NBAD) prepaid card offers could be ideal for you.
NBAD and UAE Ministry of finance have partnered together and brought to you eDirham Prepaid cards. These are accepted in most of Federal Government offices and also UAE Ministries. You do not need to have a bank account to own a NBAD prepaid card.
There are 5 types of eDirham cards that you can choose from:
#1. Blue eDirham Prepaid card (Al Haslah Card)
This is a magnetic stripe card, co-branded with Visa. This card is accepted worldwide and also at eDirham G2 merchants. This card expires in 2 years and that date of expiry is printed on the card. This reloadable card cannot be customized. This card comes with a purchase price Dh 7. You can reload this card with a maximum amount of Dh 20,000 per transaction and same per day. Max reload per month is Dh 400,000. The maximum cash withdrawal per transaction is Dh 5,000 and max amount per day is Dh 5,000 too. Max balance is Dh 20,000.
#2. Red eDirham Prepaid card (Al Haslah Card)
The Red card is a private labeled prepaid card and has a purchase price of Dh 6. This is accepted only at eDirham G2 merchants.This also is a magnetic stripe card. The maximum reload per transaction is Dh 50,000 and max reload per day is also Dh 50,000. The max reload per month is Dh 1,000,000. Max withdrawal per transaction and per day is same as Red card. Max balance is Dh 50,000.
#3. Gold eDirham Prepaid card (Al Haslah Card)
This card is more secure as it is embedded with a microchip processor and it is a private labeled card. Accepted only at eDirham G2 merchants, this card has an expiry period of 3 years which is printed on the card. One of the best features of Gold eDirham prepaid card is that you can customize it. You can have your name and picture on it. The purchase price is Dh 25. Max reload per day and per transaction is Dh 10,000,000. Max reload per month is unlimited. Max balance is Dh 10,000,000. cash withdrawal is same as Blue and Red cards.
#4. Green eDirham Prepaid card (Al Haslah Card)
How Green card differs from Gold card is that, this is a visa co-branded card and is acceptable world wide. The purchase price is Dh 27. The reload limits and max balance limits are established at Dh 50,000.
#5. Silver eDirham Prepaid card (Al Haslah Card)
This is similar to Green Prepaid card. Max balance is Dh 2,000,000.
What I infer from this payroll prepaid card is that you can transfer your salary on this card and you can use your card to pay to retailers and also withdraw from this card from ATMs all around the world. You will save on bank fees as you do not have to open an account to have Ratibi card. When you enroll for this card, you get a free accident cover and you do not have to maintain a minimum balance.
Advantages and disadvantages of prepaid credit cards:
In case of prepaid credit cards, the premise is very simple. You pre-load you card and then you spend from it. That way it creates a win-win situation for both the bank and you. The Bank is not worried about losing its money and you are not worried about falling in a credit card debt spiral. Best part is, you are still allowed safe and speedy payments and also a lot of convenience. Also you can do away with bulging wallets with a wad of cash.
Benefits of Prepaid Credit Cards in UAE/Dubai/Other Emirates:
#1. Security Check
In case of a normal credit card, the banks want some kind of security against the money they lend in form of credit cards. In UAE, banks take security checks signed from customers. So in a scenario where a customer is missing out on credit card bill payments or if he is unable to even make minimum payments, then banks would resort to this security check. But in case of prepaid credit cards, you need not deposit a security check as you loading your card in adavance. Of course there is minimum and maximum amount that you can load stipulated by respective banks. And you need not have a bank account to have a prepaid credit card.
#2. You can Never Fall into Debt
Since you are using your own money and only to the extent available on your prepaid card, there is no question of debt. There is no credit as such.
#3. Develop Financial Discipline
With a prepaid card like eDirham card from NBAD, there is no question of spending beyond your means. You will try and spend on that what is required than what is good to have or to own. That way there is a constant check on what you spend on, whether you should splurge unnecessarily and also whether you can afford it.
#4. Lessons in Money Management
Prepaid credit cards are best for students who have yet to learn about money and how to manage it. If at a young age you start gaining control over your finances, you will no problem in managing your finances, later in life. Also initially if you start out with a prepaid card, whether you are a student or not, you can develop much needed skills in money management.
#5. Convenience of a Credit Card
You can have the same convenience and ablity to make speedy payments as confered by credit cards. Since most of the prepaid cards offered by banks in UAE are chip cards, they are more secure.
One thing you need to be careful about prepaid cards is the fees. The fees could include initial card purchase, loading fee, reloading fee, administration fee. Have a tab on these and you will be OK.
#2. Prepaid Card is not as same as a Debit Card
In case of a debit card, you need to have an account with the issuing bank. So when your funds are lying idle, they still earn interest. But no bank account is attached with a prepaid card. When are funds are lying idle, they are dead cash. And again the security and safety extended to funds in a bank account may not be extended to funds on prepaid cards.
#3. Purchase protection
The purchase protection which covers credit cards users won’t be available to prepaid card users.
Well, prepaid cards are good but do allow a lot of money to be tied on a prepaid card. Money should earn more money even if it lies idle. Have a minimum balance on your prepaid card and you can always top-up when more funds are required. Best part is, prepaid cards keep debt at bay!