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Mon 8 Mar 2010 07:25 AM

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Credit cards are main source of Arab youth debt

More than a quarter of Arab youth have some form of personal debt - survey.

Credit cards are main source of Arab youth debt
IN THE RED: More than a quarter of Arab youth have some form of personal debt, the majority of which is owed on credit cards. (Getty Images)

More than a quarter of Arab youth have some form of personal debt, the majority of  it owed  on credit cards, according to the results of a new survey unveiled in Dubai on Sunday.

The second annual Arab Youth Survey, which was carried out in October last year and involved face-to-face interviews with 2,000 youngsters in nine countries, found that 26 percent of young Arabs had some form of personal debt. [

Click here to view the key findings of the Arab Youth Survey

]

At 52 percent, Saudi Arabian youth were the most indebted in the Middle East. Two thirds of Saudi respondents’ debt was due to credit cards, which was the case in most of the countries surveyed.

In the UAE, 23 percent admitted to having personal debt. Bank loans accounted for 38 percent of the debts, followed by credit cards (32 percent) and student loans (15 percent).

Jordan had the most prudent respondents, with only 8 percent admitting they were indebted financially.

This comes at a time when 67 percent of respondents also said they were worried at the rising cost of living in the Middle East. Unemployment was also seen as a concern for 43 percent of youngsters, while 38 percent added that they felt that the financial crisis had affected their income levels.

In January, MasterCard’s Index of Consumer Confidence Survey found that consumers in the UAE are approaching the next six months with renewed optimism.

The latest survey was conducted in October and November 2009 and involved 2,400 consumers from six markets in the Middle East and Levant regions.

However, MasterCard said the survey was conducted prior to news of Dubai World's debt announcement, adding that it could not say what impact that might have on the figures.

“Consumer Confidence in the UAE has significantly increased and consumers appear optimistic about the future,” said Raghu Malhotra, area business head, Middle East, Gulf Countries, MasterCard Worldwide.

“Regarding purchasing priorities, it is interesting that in the UAE dining and entertainment, buying property and fashion and accessories, emerged as among the top spending categories for consumers.”

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