UAE: What if I can’t pay my credit card after losing my job? – information

Experts elaborate on details of agreements signed between card issuers and customers

I couldn’t afford to pay my credit card and I lost my job. What happens if I don’t pay my credit card fee?

A credit card is a loan issued by a bank or financial institution to the cardholder, which can be used to purchase goods or services within specified limits. When signing the credit card issuance application form, the applicant signs a personal loan agreement that includes all relevant terms to safeguard the interests of the issuer in case of default. In addition, the applicant signed an undated security check kept by the issuer as collateral in the event of default on credit card charges.

Any transactions made with the credit card are recorded in the issuer’s records and a statement is generated at the end of the billing period so that the credit card holder can pay dues on or before the stated due date. These dues are considered an event of default if they are outstanding for three consecutive months.

Beyond the period stipulated in the personal loan agreement, the credit card issuer reserves the right to present the bank with a secured check for payment. If this security check is not paid due to insufficient funds, the Issuer will proceed with legal proceedings in court to recover the outstanding dues. Issuers can also ask the courts to impose a travel ban.

In addition, outstanding payments will continue to incur penalty interest until dues are paid in full. Don’t miss the fact that your credit score will be affected, which will reduce your chances of seeking out a loan or credit card in the future.

Dhaval Jasani is the CEO of ZTI Global. KT file

While we sympathize with you at this time, it is best for you to contact your card issuing bank or financial institution, state your situation, and seek relief for paying these dues in installments, and seek waiver of penalty interest before they proceed to legal proceedings in court. The issuing bank or financial institution reserves the right to accept or deny this request, but your modest attempts may work in your favor.

I just started working and I need to understand what a typical budget looks like.

Planning one’s finances is not a challenge, but an opportunity to understand the intricacies of money and finances. While the numbers in the equation vary from person to person, you may choose to apply the 50-30-20 rule of thumb to cover needs-want-savings. 50% of your net take-home pay can be allocated to cover your monthly payments and expenses. 30% of your net take-home pay can be allocated to discretionary expenses of your choice. 20% of the balance is allocated to savings, which you can choose to accumulate to cover a minimum of six months of monthly payments. In addition to this accumulation of savings, you can also choose a long-term insurance plan that will benefit you in retirement. You can also adjust the rule to 60-20-20 if you want, with the goal of prioritizing saving over spending.

The author is the CEO of Zhongtian International.