Debit Cards, Credit Cards, Cash Withdrawals in the UAE

The bank account opening process is not the only aspect that is usually associated with many follow-up questions. Majority of questions surface as soon as your account is open and operational, because it is at that moment, when you realize that you need information on your debit and credit card usage, you also want to know your daily limits and more. In this chapter we will talk exactly about usage of cards and will cover the aspect of cash withdrawals using these cards.

Let’s start with your debit card first. As a company owner you may require one for payment of charges associated with business operations. Therefore, remember to discuss the possibility of receiving a debit card for your company with the bank you have chosen for account opening purpose in advance. The reason is that some of the banks stopped issuing debit cards for certain categories of companies. For example, some do not issue the card, if a company has more than one owner, other banks do not issue cards to companies incorporated in free zones, some do not issue debit cards to companies in general and there can always be some new rules coming into play. Just bear in mind that different banks have different approaches with respect to company debit card issuance, as such, it is always helpful to find out all terms and conditions beforehand. As far as the debit card for your personal account is concerned, there are no special rules you shall be aware of.

Another aspect you should know is that all debit cards, both personal and corporate, issued in the UAE, are linked to your UAE Dirham account. Therefore, if you open, for example a US Dollar account only in one of the UAE banks, you will not receive any debit card and you will have to use online banking for all your transactions. If, however, the debit card is required, you will have to maintain accounts in several currencies, one of which would be UAE currency, a UAE Dirham. In light of this, many entrepreneurs ask the following question: if I have a bank account in two currencies, UAE Dirham and US dollar, and in UAE Dirham account balance is zero, while US Dollar account has sufficient funds, and I still try to pay by the debit card linked to UAE Dirham account, will the bank automatically convert necessary amount from US Dollar to UAE Dirham and transfer it to the UAE Dirham account, so that I can withdraw money or pay for the item I intend to buy? Unfortunately, your debit card is not linked to any of your other sub-accounts except for the UAE Dirham account and there is currently no infrastructure for such transactions. What to do, you may ask?! If you know that your UAE Dirham balance is zero or it is not sufficient for the planned purchase, use online banking facilities to transfer funds between US Dollar and UAE Dirhams accounts and once completed, proceed with payment.

As soon as you hold a debit card, the next most frequent question comes. It pertains to the daily limits on withdrawals from ATMs. Daily withdrawal limit amount largely depends on the financial institution you are banking with, whether withdrawal is from the ATM of your bank or another banking institution, whether you are withdrawing in the UAE or abroad and if abroad, then in what country exactly, whether you are a standard customer or priority. Additionally, some other factors may affect the maximum amount allowed for withdrawal. Depending on the circumstances for your debit card you may be allowed to withdraw from AED 5,000 to AED 35,000, with an average being AED 10,000.

If it is important for your company to have a card you can pay with and your bank cannot issue you a corporate debit card or you simply need a credit card for your personal use, you can always apply for a credit card issuance. In this particular case, you will need to take several facts into consideration: first, there is a cost of maintaining a credit card, which may vary from bank to bank and be somewhere between AED 700 per year to approximately AED 2,000 or AED 3,000 a year. Secondly, you need to ensure timely card replenishment to avoid paying interest on the outstanding balance. Thirdly, you can earn points, stars or other rewards, which you can further redeem for future travel or purchases. Next, if you are planning to use your card abroad enquire with your bank about overseas usage rates. Some banks may charge up to 2 or 3 per cent of your expense as processing fees each time the card is used. And last but not least, be careful with cash withdrawals from your credit cards. Banks apply cash advance processing fee, which may range from 3 to 5 % of the total amount withdrawn. As such, if you withdraw 1,000 us dollars, you may need to pay up to 50 us dollars each month, until your debt is paid off. Therefore, our recommendation is always to use your credit cards wisely and avoid mounting debts.

In general, to be able to apply for a credit card, both for your company and for your personal use, your company and you will need to meet certain requirements. For a company’s card, turnover will be an important factor, while your monthly income will be considered, when applying for a personal credit card.

Banks in the UAE offer a multitude of credit card programs and a number of debit card options that come with various benefits. So you will definitely find those products, which will suit your personal and corporate needs most. We always recommend to speak to bank representatives before you go ahead with any option, and ask all those questions, that we discussed in this chapter. This will allow to avoid unmet expectations and choose the most suitable product for you and your company.

If you want to know more about Dubai freezone company formation, feel free to get in touch with our professional consultant team and we would be delighted to assist you and help you to compare Dubai freezone company setup costs and help you to find that free zone, which would suit your business needs the most.

Disclaimer: Business Boutique UAE-Consultants.com is not affiliated with any particular government or legal entity. Business Boutique does not give professional legal advice nor any other professional advice subject to a public office in the government. This article merely sets out a simple and basic idea as to the reasons of Dubai freezone company setup and Dubai free zone company formation cost. Business Boutique in no way holds nor imposes any official governmental or legal authority and the article herein is only to be taken as a guide. All further governmental or legal issues should be addressed to the corresponding authorities.

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