x Abu Dhabi, UAESunday 21 January 2018

New move to cap card interest rate

FNC members expected to resume attempt to keep rates down.

Abu dhabi // Moves to cap interest rates on credit cards and bank loans should resume when the Federal National Council returns from its summer break.

Interest rates are high compared with the rest of the GCC. Most credit-card rates are between 2.25 and 2.99 per cent, equivalent to 27 to 35.88 per cent annually. In Saudi Arabia, the rate is between 1.6 and 2 per cent.

At an FNC meeting in May, Mohammed Al Qubaisi from Abu Dhabi asked Sultan Al Suwaidi, the Governor of the Central Bank, to find a way of capping bank interest rates. "Banks make a lot of profit from us locals," he said.

The council referred the issue to a four-member committee whose recommendations are expected in October.

In the meantime, avoid paying high interest rates by being vigilant about the fine print on any contract you sign.

Always pay the billed amount in full by the due date, or you will be liable for interest.

Also, be sure to read your credit card statement every month and scrutinise all entries.

If you see any discrepancy of anomaly bring it to the notice of the bank immediately.