Holding the cards

by Craig Holding Wednesday, 16 January 2008

There don't seem to be too many hidden bells and whistles on this credit card and having read the terms and conditions that come with it, it seems a good product overall.

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The bank is offering 2% cashback on purchases over AED3000. So for instance if you spent AED3000 they would credit your card back with AED60 - 2% of 3000.
That doesn't mean though that if you have AED2000 and you have AED1000 worth of charges and interest to pay, that you would be eligible for the 2% cashback.

There are clear advantages to the bank of making this offer and the prospect of getting money back for spending money is a very attractive one for potential customers.

But customers must be aware that if they spend AED3000 in a month then don't pay this back within the time required they will be charged interest by the bank.

And the interest rate that kicks in would probably be higher than AED60 anyway.

I tried to find out about the interest rates on the card and didn't find any information on this but I'm guessing they would be around 16% - that's a rough guess.

It's like any of these sorts of rewards schemes. If you use the card correctly and don't make late payments then you're fine and in this case you get free money.

But if you don't use the card properly then you could get stung by high interest rates and charges.

This sort of offer is very good. But customers would have to resist the temptation to spend AED3000 when they don't need to just to take advantage of the offer and obtain the cash.

This could make people think ‘ok I've spent AED2000 this month, but if I spend another AED1000 then I'll get the cashback'.

It could tempt them into buying items that they don't actually need. Maybe they would buy that extra camera or mobile phone just to try to achieve the cashback.

The prize draw is obviously another incentive for customers. I don't think it's something that would tempt them into spending more money than unusual as you get an entry into the draw for every AED100 you spend.

And if you spend AED1000 you get 10 entries.

The fact that there's no annual fee charged with this card is a big advantage and it makes a big difference as annual fees can be very expensive. If you look at the cards that have awards programmes attached to them, they do charge a lot in the second year even if they don't charge in the first year. They might charge AED300 or AED400 a year and it's not worth it just for the rewards that you get.

According to the advertisement the card also has a range of lifestyle privileges, which is always good news for customers particularly if the rewards are redeemable in places where they would usually spend money.

This card would usually have some sort of criteria customers would have to fulfil in order to be eligible for the card.

That would usually be to do with the customer's salary - although in this country banks are often quite flexible about this.

For further information contact:
Craig Holding - cholding@acuma.ae, Tel: +971 4 332 8582



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