Consumers in the United Arab Emirates (UAE) have received a warning that a credit limit should not be viewed as a spending goal. According to this warning, if only the minimum monthly payment is made, a card balance of AED 10,000 could take nearly nine years to clear and cost over AED 22,000.
In an interview with Khaleej Times, Ambarin Musa, CEO of Revolut, noted that over AED 12,250 of this total amount would consist solely of interest. She cautioned that even a relatively modest debt can become a long-term financial burden, advising customers to pay off the full statement amount every month or, at least, pay significantly more than the minimum required payment.
The Revolut CEO based her example on a hypothetical monthly interest rate of three percent. The minimum payment is assumed to be five percent of the outstanding balance, including interest, or AED 100, whichever is higher. If the cardholder makes no additional purchases, clearing the debt could take about eight years and nine months, with the total payments amounting to approximately AED 22,257.
In the UAE, credit card interest rates typically range from two to four percent per month, which equates to approximately 30 to 45 percent annually using simple annual calculation. Musa explained that unpaid amounts accrue interest, and if the balance remains unpaid in the following month, the holder begins paying 'interest on interest.'
She stated, 'Even increasing monthly payments by a manageable amount can significantly affect the overall cost of borrowing.'
According to the UAE Central Bank's Q2 2026 lending sentiment survey, financial institutions have adopted a more cautious approach to personal lending, with the overall net demand for lending decreasing by 20.5 percentage points. The decrease in appetite was observed across all lending categories, with the largest drop recorded in auto loans, followed by credit cards and other housing loans (including refinancing and renovations). Appetite for personal lending is expected to recover across all categories in the next quarter, with the overall net balance projected at +13.3 percentage points, with the strongest growth anticipated in credit cards and housing loans.
Musa emphasized that a credit card is a form of borrowing, not an income expansion. She noted, 'Credit cards can be a useful financial tool when used responsibly,' but problems arise when consumers use credit to cover daily expenses they cannot comfortably afford.
She urged residents to set a personal spending limit based on their income, rather than the limit offered by the bank. To maintain spending awareness, she advised budgeting, regularly reviewing transactions, and using real-time spending notifications.
Musa added that a stable income does not guarantee sound money management. Credit cards can create a gap between spending and the person's actual funds in the bank account. High limits can tempt consumers to perceive available credit as extra disposable income. Furthermore, small purchases, especially digital payments, can accumulate quickly because spending feels almost unconscious.
In her view, there is no universal number of cards a salaried employee should have, as it depends on individual circumstances, obligations, and spending habits. Many UAE residents hold several cards to earn cashback, miles, or bonuses.
However, each card can affect a person's Debt Burden Ratio (DBR), which measures monthly debt obligations relative to income. She reported that the maximum DBR in the UAE is usually 50 percent, and banks generally consider five percent of the total card limit when assessing creditworthiness, even if the cards are unused. For a person earning AED 10,000 per month, total monthly debt obligations should generally not exceed AED 5,000 to meet requirements for obtaining additional credit.
Managing multiple cards can also complicate tracking expenses, due dates, and balances, and increase vulnerability to fraud. A common mistake is losing control over total spending across all cards or using one line of credit to pay off another without addressing the underlying spending behavior issue.
Musa stressed, 'Having multiple cards does not necessarily mean greater financial flexibility.' She also mentioned that consumers often underestimate the cost of late payment penalties, cash withdrawal fees, and interest on outstanding balances, which can accumulate quickly even if annual fees are predictable. Many also overlook currency exchange fees on international spending, which are stipulated in the contract terms and fee statements.
She recommended paying bills on time, avoiding cash withdrawals when possible, checking fees before international transactions, and analyzing monthly statements for unexpected debits. Cardholders should also protect their personal financial information and never share one-time passwords or credentials.
For new residents in the UAE, a credit card can be a good way to build a credit score, which can subsequently help in obtaining a mortgage, Musa said. However, it should not be seen as easy borrowing, and a poor rating due to misuse can have the opposite effect. She concluded, 'Financial responsibility lies not in refusing credit cards, but in using them wisely.'