Dubai is a place full of shopping malls, skyscrapers, high end hotels, luxurious cars, giant supermarkets and many other places that will lure you into a spending spree. Most banks here provide free for life credit cards, loans at low interest rates & mortgages. I get call every other day from some bank trying to sell any of these products. Most of these banking products look very attractive and beneficial from the face of it. it gives you opportunity to get those expensive shoes or the latest iPhone irrespective of your current bank balance status.
Also, you see people splurging cash around and that further motivates to jump on the purchase bandwagon. One of the primary reason why banks go that extra mile in UAE to sell credit products is to do with high cash reserves. Generally, availing interest on deposit is not acceptable under the islamic banking. This gives banks conducive ecosystem to grow. Most banks in UAE are highly powerful and invest heavily on latest technological marvels like blockchain and AI.
Once you sign up for any of these services, you might get stuck in the endless loop of debt. Life in Dubai is unpredictable. Job security is not much prevalent mainly due to fluctuations in economy. In case an expat loses his / her job, S/he have just 2 months to try to get something else or leave the country. Settling credit cards and mortgages at such juncture is almost impossible. Once you miss payments, the profit amount will keep piling on top of the principle amount and you will keep swimming against the tide every month to finish off the dues.
This phenomenon is common almost everywhere in the world. Education has become a commodity and tuition fees are sky rocketing high. Students generally end up taking loans from bank in order to pay college fees. Jobs are scarce & unemployment to its level high. Young lads fall into this tremendous pressure to pay back these huge loans.
What follows for many is a life of despair, poverty and anxiety. Thousands commit suicide every year giving up on life because of their inability to pay back. Having own home has become a luxury. House prices in some parts of the world are so high that it can take up to 70 generations to be able to afford one.
Interest economy is like quick sand, it will suck you in sooner or later. Always stay away from it as much as you can. Yes, it will give you ability to spend more than you can earn however, thats the worst part of it. One should never spend more than his / her earning.
Some mortgage payments like house loan have 20 – 30 years of payment cycle. That’s nearly half your life! Such a commitment will only make your life miserable & distressed. Everybody has to die one day, these cars, houses are not going to accompany you but the loans on them will ravage your life while you are still alive.
i applied for a card 😦