A new report published by Khaleej Times on Tuesday is warning UAE credit card holders about the hidden cost of paying only the minimum amount due, using a stark example: a Dh10,000 balance left to minimum payments alone can end up costing more than Dh22,257 before it's cleared.
The calculation assumes a monthly interest rate of 3 per cent and a minimum payment set at 5 per cent of the outstanding balance or Dh100, whichever is higher — a standard formula used across most UAE banks. Under those terms, it would take roughly 8 years and 9 months to pay off the Dh10,000 debt, with interest charges alone adding up to more than Dh12,250.
Credit card interest rates in the UAE typically range between 2 and 4 per cent a month, which translates to an annualised rate of roughly 30 to 45 per cent — far higher than conventional personal loan rates.
"A credit limit is not a spending target," said Ambareen Musa, CEO of financial comparison platform Revolut, who was quoted in the report. She added that financial responsibility "is not about avoiding credit cards, but about using them wisely."
The report also cited the UAE Central Bank's second-quarter 2026 Credit Sentiment Survey, noting that banks generally factor in 5 per cent of a customer's total credit limit when calculating debt-to-income ratios, with the maximum allowable ratio typically capped at 50 per cent of income.
Financial advisers recommend that cardholders pay off as much of their balance as possible each month rather than sticking to the minimum, to avoid years of compounding interest eating into their finances.