Chances are that you have seen your parents use them; your relatives and friends too. Credit cards are now an essential piece of convenience in everyone's wallet, for both physical and online shopping. You’re eager to join the club and get your first credit card, but with the myriad of options available in UAE, you’re probably spoilt for choice and wondering how to select the best credit card for you. To be fair, it is a major decision. So how do you know which card is right for you? First of all, you need to determine that you’re eligible for a credit card.

Am I Eligible for a Credit Card?

Age: While some accept applications from 18 years old, most institutions offering credit cards in the UAE have a minimum age requirement of 21 years.

Salary: Minimum salary requirements vary across institutions and credit cards, but the least amount you have to be earning to access any kind of credit card in the UAE is AED 5000 per month.

Credit History: For first time credit card holders with little or no credit history, you can either get a secured credit card (a credit card backed by a cash deposit), or one with limited options, which will be upgraded based on your card payments.

So now that you’ve determined your eligibility, how do you choose the right credit card for you?

How to choose the right card?

Lifestyle

What is the one thing that you are most likely to spend on? Alternatively, which of your monthly expenses is unavoidable? Fuel, perhaps? Maybe your job requires you to travel more within the city. Travel — you spend half the month flying across local and international destinations? Shopping — you love pampering yourself? Whatever your lifestyle, there is a credit card that rewards your spending choices with benefits ranging from free fuel and lounge access to reward points at retail partners, air miles, cash back etc. So when selecting a first credit card, choose one that gives you the maximum rewards and privileges, according to the categories you spend on.

Joining/Annual Fees

Not all credit cards have a joining or annual fee. If there is a fee, make sure it is accompanied by adequate rewards, which come in the form of air miles, free fuel, reward points etc. You will find that the bank may charge a joining fee the first time you apply for a credit card, and an annual fee from the next year onwards. You might wonder, "Is it really worth it?" You should carefully compare the fees with the rewards and privileges before you make your choice.

Credit Limit

It is the maximum amount you are allowed to spend, set by your bank, based on your credit score. Needless to say, it varies from person to person. For your first credit card, your bank will set a limit based on an analysis of your bank account, but over time, if you turn out to be a frequent credit card user who always pays back on time, your limit can be increased. However, ensure you do not splurge beyond the credit limit as you may be charged for exceeding your limit.

Cash Advance and Limit

This feature comes to your rescue in a cash emergency and allows you to withdraw money from the ATM using your credit card. There is also a limit as to how much you can withdraw; usually the limit set by the bank is less than your credit limit.

Tips for First Time Users

  1. Pay the full outstanding amount on time

    Paying your full credit card bill within the grace period helps you build your credit score. For a first time user, this is very important, as a higher credit score opens you up to more benefits. Setting up a direct debit/autopay option is a great way to make sure that your bill is paid on time; however mistakes happen and you might forget. So as a first time user, consider opting for a card that has zero late payment fees, like the Citi Simplicity card.

  2. Spend below your credit limit

    Another way to gain/maintain a good credit score is to keep your spending below your designated credit limit. Some experts advise using around 30% of your limit across all your cards. This means that if you have two cards with an AED 5000 limit each, then you should be looking to spend around AED 3000 across both cards. You can even pay down your bill multiple times a month, to keep your utilization rate low. Over time, as your credit score increases, consider asking for a credit card limit increase; but be sure to spend wisely so as to maintain a low utilization rate.

  3. Use Your Credit Card

    While keeping a low utilization rate is good, not using your credit card at all does nothing for you. Credit card issuers are interested in how you actually utilize your limit, so you should endeavor to pay for things with your card to build a good credit score. Having a good credit score gives you access to lower interest rates on loans and mortgages, amongst other things. Also, the more you use your credit card, the more rewards and benefits you can access, so get to swiping (responsibly) today!

Choose the Best Credit Cards offered by Citibank UAE

Citibank offers some of the best credit cards in the UAE and if you’re considering applying for your first credit card, we’re a good place to start. With friendly fees/rates, discounts, travel rewards, statement credit and so much more, we offer an exciting world of benefits. What’s more, we have a selection of cards to match different preferences and you’re sure to find the perfect fit just for you.

Visit www.citibank.ae/cards to learn more about our credit card products