NBD offers credit to the masses

National Bank of Dubai’s new Visa Classic makes it easier than ever for consumers to get a credit card; but how will NBD ensure applicants' credit worthiness?

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By  David Ingham Published  May 5, 2001

National Bank of Dubai (NBD) is making it easier than ever for UAE consumers to get hold of credit cards with the introduction today of its Visa Classic Credit Card. Applications for the card will be accepted from individuals with monthly salaries as low as AED 4000.

An annual fee of AED 150 is waived for the first year, and interest rates are 1.25% for NBD customers and 1.75% for non-NBD customers. Interest is free for up to 55 days.

There’s also a host of other cardholder benefits, such as emergency replacement, complementary travel accident insurance and discounted airline tickets.

“With one of the lowest interest rates in the UAE and no standard first year annual fee, NBD’s card holders will now have a credit card packed with an extensive range of value added services,” said Ali Al Khaitoob, business development manager, NBD Retail Banking.

But whilst consumers may welcome the introduction of a credit card for the masses, it could be a risky move because there are no credit ratings agencies in the UAE. It’s no coincidence that credit cards have so far been largely restricted to the Gulf’s most wealthy individuals.

Al Khaitoob spoke of checking up on an individual’s salary level, but offered few concrete details on how NBD will check on applicants’ creditworthiness.

Only this week, Mastercard admitted that bad debt is an issue for regional credit card issuers. “The lack of ratings agencies is limiting growth in credit card usage,” said Mohamed Belarj, Mastercard’s VP and general manager for the Middle East and Africa.

Although moves to create credit ratings agencies have been made, no official progress is apparent. That was confirmed today by Jonathan Cabedo, Visa’s deputy regional manager. “The Central Bank is working with a number of banks — not all of them — with a view to putting a system in place, but how far that’s gone I don’t know,” said Cabedo.

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