Luxury vs. prudency: how to be judicious about choosing a credit card

Published March 1st, 2015 - 08:12 GMT

While choosing from a plethora of credit cards in the market, consumers should choose one which supports their lifestyle and at the same time gives them the flexibility of using their reward points anywhere.

According to research, travel is the top priority for residents in the UAE, followed by experiences.

The survey said 47 per cent of the respondents from the UAE, in face-to- face interviews, would spend on luxury experiences and another 45 per cent would allocate their income to social events. Another 35 per cent were expected to spend on fine dining and a quarter will spend on high fashion or designer wear. While on holidays, the respondents said their number one priority was luxury accommodation and sightseeing.

But consumers don’t stand to benefit because the card may be linked to one particular airline and clients stand to lose if they travel by other airlines.

To make it convenient, American Express has launched a platinum credit card where the consumer can earn rewards by either shopping at a grocery, buying coffee at Starbucks or shopping at the Dubai Mall or even staying at luxury hotels such as Jumeriah.

“We have also identified that for residents in the UAE there is a strong preference for a credit card that is linked to a frequent flyer programme such that of Emirates or Etihad. What we have seen with these card products is that they are linked to either one airline or the miles that they earn expire so there is a validity period. and the earned rate fluctuates according to the type of spend or location of the spend,” Mazin Khoury, Chief Executive Officer of American Express Middle East told Gulf News.

So to counter this, Amex has launched a credit card that will give the flexibility to collect reward points and spend them anywhere and anyhow without any expiry date.

“We conceptualised the American Express credit card to imbibe these features and it’s a card whose reward points never expire and it’s linked to just not one airline but linked to 12 airlines including Emirates, Etihad, British Airways, Delta Air Lines, Gulf Air etc,” said Khoury.

These points are earned in full and the card guarantees two membership points for every Dh4 spent. The card comes with other travel-related benefits such as retail protection and access to 700 airport lounges. The annual fee is waived if the customer spends Dh10,000 in the first year, and Dh40,000 in the subsequent years, he said.

The clients have flexibility in using the reward points collected from buying groceries to staying at a luxury hotel such as Jumeriah and Hilton or shopping at The Dubai Mall.

Credit bureau

“Cards are a method of payment that offers security, trust and peace of mind, when used according to their offerings. We want to ensure that clients that have the card that support their lifestyle. We ensure that customers who have our card have the right card,” Khoury added.

“We carefully ensure that customers who take our product have the appropriate spending in line their income. Customers need to understand the spending capabilities that they have and coming from the information that we have with us. We ensure that a right product is provided to the customer, so they don’t fall into the debt trap,” he said.

The way to improve their credit score is to pay on time, and know what their income is and how much they can spend. The use of the bureau is for the benefit of the customers, economy and financial institutions offering the benefits, he said.

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