There is no denying the fact that plastic money, especially in the form of credit cards, has made the lives of many, simpler and easier. You can purchase goods and services now and pay for them at a later date and honestly, who doesn’t like having such perks? But, one hurdle that many face when it comes to enjoying the luxury and benefits that a credit card offers is a bad credit score. This can in fact, easily be said to be the biggest gap to bridge when it comes to owning a credit card as a good credit score is an essential part of the eligibility criteria, that banks have for giving a customer a credit card facility. This might also be a contributing factor to the negligible percentage of the UAE’s population having a credit card.
Need basics about credit score? Don’t worry, we’ve got you! A credit score is essentially a rating given based on your credit history. The credit score summarizes an individual’s payment history of loans, credit cards, and any other form of credit that the individual would’ve taken from the bank/lender or financial institution. In the United Arab Emirates, a credit score is essentially a 3-digit number ranging from 300-900, and the higher it is on that range (closer to 900), the stronger the credit rating of that individual would be.
Usually, a credit score of anywhere around 700 and higher is considered to be a good credit score and a credit score of around 500 or less is considered to be a bad credit score. It is typically tougher for someone with a bad credit score to get a credit card. Tough, but not impossible! Below are a few handy tips that will help you in obtaining a credit card if you have a low credit score.
- Know Your Credit Score
Most people usually get to know that they have a low credit score when they apply for a credit card or a loan and it ends up getting rejected. You should have an idea of where you already stand with respect to your credit rating and this can be done by checking your credit score online so that you know what are the types of finance options you would be eligible for, especially if you would be eligible to apply for that particular credit card or not. If you apply for finances that you aren’t eligible for, it doesn’t matter whether you are aware of your credit score or not, once the bank rejects your application it further negatively impacts your credit score.
- Don’t Apply for Credit Cards That Require a Good Credit Score
Another very important tip, in line with our previous one, is, you shouldn’t apply for credit cards that require a good credit score. some people tend to apply for loans or credit cards that mandatorily require a good credit score, knowing they have a low or average score and this is an absolute no! Don’t apply for any credit card or loan or any other finance option when you know that that particular option requires a high credit score, which you do not have at the time, as this will do more harm than good to your existent score.
- What to do then?
Ideally, you should consider a credit card aimed at people with a low or poor credit score. Find the best credit cards that would be apt for people with bad credit scores. Banks and other financial institutions offer a few options of credit cards that are particularly designed for people with a low credit score and these cards when managed properly, will even help you enhance the credit score that will, in turn, open up other financial possibilities for you. However, a note of caution that is due here is that such credit cards that are available for customers with a bad credit score, often come with an interest rate that is higher than the usual rate and the credit limits on these credit cards are also comparatively low.
The best way to manage this type of credit card would be to only spend a small amount and pay the outstanding balance on the card, in full every month. Using a credit card responsibly would increase your credit score.
- Aim to Switch to a Better Credit Card
If you happen to get a credit card, despite your low credit score, you shouldn’t just settle with this temporary situation as it isn’t an ideal one. This is because when people with a low credit score are given credit cards, there are usually lesser benefits and perks attached to that card when compared to the attractive benefits that are offered to someone with a good credit score. In addition to this, they charge a high rate of interest, annual membership fees, and offer a low credit limit to you.
Therefore, your main objective should be to pay all the outstanding amounts on your credit card, in full at the time when it is due. By doing this and increasing your rating, you would soon qualify for a better credit card, with better benefits, perks, and a greater credit limit.
- Try to Improve Your Credit Score
There are plenty of banks and financial institutions in the United Arab Emirates that offer some of the best credit cards in the UAE that come with various offers and benefits. If you want to be eligible for such a card, you should focus on improving your credit score by maintaining a good payment behavior and paying your credit card bills and other loan repayments on time, keeping the borrowing to a minimum, and not applying for multiple credit cards at one time.
Finally, even though you get a credit card even with a bad credit score, it isn’t an ideal situation. So, while we’ve provided you with information on how to get a credit card with a bad credit score, we ought to also advise you to be consistent in paying off your financial dues and being careful with your finances, because ultimately your aim should be to enhance your credit score so that you can get a credit card with better advantages and not be stuck with the one with lower credit limits and higher interest rates.
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