UAE Laws and Islamic Finance

Laws of the UAE and Islamic Finance

Credit Cards in the UAE



‘A contract regarding credit cards is completed upon the issuer’s approval of the customer’s application to join the holders’ agreement.  The customer is regarded from that date as accepting the terms stated in the application including those relating to interest.

In the case there is no agreement, interest may be calculated in accordance with the market rate and should not exceed 12%.  This limitation is based on Article 76 of the Federal Law No. 18 of 1993 on the grounds that the transaction is a commercial loan.

The UAE courts are not favorable towards provisions of credit card agreements, which give banks and institutions the right to unilaterally change the rate of interest or other terms and conditions of the credit card agreement.  In cassation petition 67 of 2005, the Dubai Supreme Court regarded such terms as arbitrary.  The court held that in case of any change to the agreed interest rate or levying any extra charges, the customer should be notified in advance and his or her approval must be obtained in writing.  In cassation petition 181 of 2005, the Dubai Supreme Court held that the provisions which give the bank a unilateral right to change the rate of interest automatically do not dispose of the need to seek customers’ written approval and that in interpreting such provisions, the card holders’ interests should be observed.

In cassation 121 of 2005, the Dubai Supreme Court held that a card holder should use the card in good faith and take care of and protect the card and the PIN number.  The holder should immediately inform the issuer of any loss or theft of the card and failure to do so gives rise to an obligation to pay for any unauthorized transactions.

An issuing bank may unilaterally terminate a credit card agreement and revoke the holder’s benefits and facilities provided by the card but should immediately stop charging any fees or the usual 2% monthly interest upon termination of the holders membership according to cassation petition 247 of 1990.’  (Omer Eltom)

Article 76 of Federal Law No. 18 of 1993:

The creditor shall have the right to receive interest on the commercial loan according to the rate provided for in the contract, and if the rate of interest is not specified in the contract, it shall be computed according to the rate of interest prevailing in the market at the time of dealing; provided that in this case it shall not exceed 12% up to the time of full  settlement.

“Banks will fall over themselves to try and give you a Visa or Mastercard credit card and they’re relatively easy to obtain but you do need:

  • a job with a regular salary, or income records for several months at least if self employed.
  • bank statements for 3-6 months.
  • residence visa.


Most standard cards will be free or cost 100 dhs per year. Gold cards are free to 400 dhs per year and Platimum cards 500-1000 dhs per year.

Be careful of hidden or obscure fees and charges, and opt-in services where you are opted in by default. For example things like personal accident insurance and credit card re-payment insurance. The UAE credit card market is not regulated in the same way as in the US or Europe so banks can get away with less consumer-friendly and more profitable-for-shareholders activities. Credit card limits will usually be 1-3 times your monthly salary.  Late payment fees will usually be 50-100 dhs for each month payment is late.”


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  Philip George wrote @


The Lawyer

Philip George.
Cont .No.U.A.E 0504984852
India+ 914692610812
E.Mail .

Sub: Legal Advice (U.A.E Law)

Dear Sir,
My name is Philip George (Age-45, Indian / kerala .visa .depended)
I took a credit card from First Gulf Bank in 2008 June. Amount is 16000 Dhs.I have paid my installments properly till May 2009. At that time our company works became dull and
they terminated some employs. My job also lost. I had an insurance policy in first Gulf Bank for involuntary loss of employment (First Procter) Policy started from January 2009. Job lost on April 2009. I informed to Bank on 20 th April 2009 and applied for
insurance money. At that time Bank told that with in two months will get insurance money. Again I paid 3 months more. Now one year past bank telling I have to pay double of the credit amount. When lost my job, company canceled my visa and went to India, At that time Bank asked a guaranty cheque.I given my wife’s chequ also.(Amt -16000 Dhs)

I have no job presently. Now bank tells that if not pay double of the credit amount they will go to court. What I want to do what is my offence? I had paid my installment & insurance money to bank properly, until lose my job. They have not given me any policy certificate. When I approached to bank they told that bank has taken all of the credit card holders policy together. Now what happened to policy ? Why they not collecting insurance money from insurance company to close my credit .Once bank inform me insurance money has approved and put sign and fax a paper .It also I have given. Now they are threatening me to close the credit. Pls give me an advice for further step.

Thanking you,
Philip George

  suraj. wrote @

i am having an outstanding of 60000 dhs as credit card and personal loan, i am job less since 13 months and i am in india now i am getting call from recovery agents to pay the money or else they are threating me file a legal case can you help me out what to do, i am not having single rupee to pay.

  mitch wrote @

Are banks allowed to continue cgarging interest after the case have been referred to court, and the judge allow debtor to negotiate settlemnt with his banks on credit cards loans. please advise. i heard that once the case is referred to court and judgment passed interest rate on credit cards freezes, is this correct?

  Moemen wrote @

guys, i need an advice

The bank is opening a civil case against me with an amount of 52000 providing a document which states that i have a credit card with a statemtn mentioning the below:
Credit Card limit: 71,600
Withdrawn : 161,500
Paid by card holder: 200,500
Interest :50,000
Late charges and other charges: 41,000
so 161500+ 50000+41000 -200500=52000

the charges are mainly credit shield or i dont know .
my credit card has been expired since june 2010 and i was only paying and using since that time ,, any body can tell me how can i deal with this ?

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UAE Laws and Islamic Finance

Laws of the UAE and Islamic Finance

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