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Loan calculator UAE › Credit card annual fee: is it worth it? (UAE)

Estimate only — not financial advice. Only your lender's offer is binding.

Credit card annual fee: is it worth it? (UAE)

Updated

A card's annual fee is worth paying only if the rewards and perks you actually use are worth more than the fee plus 5% VAT, and only if you pay the full balance every month. Example: a AED 1,000 fee (AED 1,050 with VAT), 2% cashback on AED 8,000 a month (AED 1,920 a year) and 4 lounge visits you value at AED 100 each leave you AED 1,270 a year ahead of a debit card. Below AED 2,708 of spending a month the fee wins. Carry a AED 10,000 balance at 36% instead, and the same card costs you AED 2,330 a year.

This page: whether a card's annual fee pays for itself. Your own card's fee, cashback or points, and the perks you would really use, against a card with no fee. No bank is named and nothing is compared for you — the figures come from the card offer in front of you. What a balance you can't clear costs is on the minimum payment page.
In the card's Key Facts Statement or the bank's schedule of charges. 5% VAT is added.
First year
Only spending you would do anyway. Rewards on extra spending are not a saving.
Points? Points per AED × what one point is worth when you redeem it × 100.
0 = no cap. If your card pays cashback only up to an amount a month, enter it.
Perks you will really use
Only visits you would make yourself.
What you would pay at the door, or 0 if you would not go without the card.
Cinema, valet, golf, travel insurance: only what you would otherwise pay for.
Your balance
A free card's cashback, or 0 for a debit card or a card without rewards.
This card, each year after the first–

    Not a valid document. Estimate for information only — not financial advice, not an offer of credit and not a bank document. Errors are possible. Only your bank's or finance company's official offer letter, contract and statements are binding.

    How to tell if a credit card annual fee is worth it

    Add up what the card gives you that you would otherwise pay for: cashback, points at the value you really redeem them for, and the perks you would use without the card. Take away the fee with VAT. Then compare with what a card without a fee gives you on the same spending. The difference is what the fee buys you. The calculator also shows the monthly spend where the fee starts to pay off, and where a rewards cap makes the free card catch up again.

    Where to find the numbers

    • Annual fee and rate: in the card's Key Facts Statement and the bank's schedule of charges. Ask for both before you apply.
    • Rewards: the cashback rate, the monthly cap, and which spending earns less or nothing — the card's terms list it.
    • Points: what one point is worth depends on how you redeem it. Use the value you would really get, not the best case.
    • First-year waivers: if the waiver depends on spending a set amount, check you will reach it.

    What the rules say

    • No cap on the annual fee. The Central Bank caps some card fees — the late payment fee at AED 230 plus VAT, and replacement, statement and letter fees — but annual, over-limit and cash-advance fees have no cap. Each bank sets its own.
    • Pay in full, pay no interest. Pay the whole statement balance by the due date and no interest is charged on purchases. Cash withdrawals are charged from the day you take them.
    • No cap on card rates. The rate must be shown on every statement. In the example above, a AED 10,000 balance at 36% costs AED 3,600 a year in interest, more than the cashback.
    • Every card counts in the 50% rule. Card repayments count towards the limit of 50% of your salary for all loans and cards. See the credit card limit calculator.

    Questions people ask

    Is a credit card annual fee worth it in the UAE?

    In the UAE, only if the rewards and perks you actually use are worth more than the fee plus 5% VAT, and only if you pay the full balance every month. The calculator shows the monthly spend where your card's fee starts to pay off.

    Is there a cap on credit card annual fees in the UAE?

    No — in the UAE, the Central Bank caps some card fees, such as the late payment fee at AED 230 plus VAT, but annual, over-limit and cash-advance fees have no cap. Each bank sets its own.

    Is VAT charged on a credit card annual fee?

    Bank fees in the UAE are quoted before 5% VAT. A AED 1,000 fee quoted before VAT costs AED 1,050.

    How do I work out what my credit card points are worth?

    Multiply the points you earn per dirham by what one point is worth when you redeem it, then by 100. That gives the cashback percentage to compare with a card without a fee.

    Is a free credit card better than a card with an annual fee?

    For a UAE cardholder who spends little or carries a balance, usually yes. A card with a fee only wins when your spending earns more in rewards and perks than the fee costs; a monthly rewards cap can make the free card catch up again at high spending.