This is to inform that by clicking on the hyperlink, you will be leaving sc.com/ae and entering a website operated by other parties.

Such links are only provided on our website for the convenience of the Client and Standard Chartered Bank does not control or endorse such websites, and is not responsible for their contents.

The use of such website is also subject to the terms of use and other terms and guidelines, if any, contained within each such website. In the event that any of the terms contained herein conflict with the terms of use or other terms and guidelines contained within any such website, then the terms of use and other terms and guidelines for such website shall prevail.

Thank you for visiting www.sc.com/ae

Proceed to third party website
Security, Person, Human

Credit Cards – The basics you need to know

Credit Cards - The basics you need to know

Credit cards can be an excellent financial tool, but just like any other financial product it also comes with pros and cons. So, whether you’re shopping online, making purchases abroad or paying for your groceries, it is essential that you understand the terms associated with it as well as its benefits.

At Standard Chartered, we’re committed to providing you with the right financial tips and tools. In this edition of our series, let’s show you how to take full advantage of your credit card and make informed decisions.

Make the most of your credit card

Unlike a debit card, a credit card is not linked to your bank account. A credit card is issued by the bank with a specific credit limit, in the goodwill that you will be repaying the money you used on or before the payment due date set. When used responsibly, it can be used to build your credit score. A strong credit score will be a gateway to better interest rates and seamless approvals for loans, such as a mortgage or personal loan.

It is also equally important that you know the benefits on your credit card such as 0% loan on card offers, cashback, buy 1 get 1 offers and discounts on retail partners so you can take full advantage of your credit card. Simple tips like regularly reading the emails from your bank and visiting the official product website will help you in your next purchase.

Understanding terminology associated with credit cards

Annual Percentage Rate (APR)

The Annual Percentage Rate or APR is basically the interest rate. APR is applied to your balance to calculate the interest you owe. This is shown as a finance charge (interest/profit) on your billing statement when charged interest/profit. APR is not applied in case of full payment of your previous bill before due date.

Credit free period (purchase grace period)

Credit cards give you the opportunity to avoid interest on your purchase from the date of purchase to the due date. This is called the credit free period or purchase grace period. To take advantage of the credit free period, you must pay the full outstanding due amount every month.

Credit card limit

You are assigned a credit limit when you first get your card. Over time, based on your needs, usage, and qualifications, this limit may change. Such changes are communicated. Most banks include your credit limit on your billing statement each month.

Financial implications in using credit cards

When is interest charged on a credit card?

You will not be charged any interest if 100% of your outstanding balance is cleared on the due date. The following scenarios will attract interest:
Paying minimum due
Interest will be charged on the amount that is carried forward.

Cash advance or balance transfers
Usually, interest will be charged on full amount from the time of withdrawal until the full outstanding cash amount is paid. Do enquire about special offers.

Detailed impact of not paying the full outstanding balance

If the full outstanding balance is not cleared by the due date, the outstanding balance will be carried forward from the previous statement. In this event finance charges will be calculated every day, at a daily interest rate on the outstanding balance. Not only that, but interest will be charged on all new transactions from their respective transaction dates as well, until a payment of the full outstanding is done.

In effect, you can enjoy a credit free period on your credit card only if your outstanding balance is cleared in full by the due date.

Implications of going over your credit limit

If your credit card account balance goes over the set credit limit at any point in time, an over-limit fee will be charged. This fee will be applied on your statement date every month until you are within your credit limit. It is imperative that the over-limit amount is cleared immediately.

Think before you pay in AED when shopping abroad

When shopping abroad or online, most websites and retailers offer you the option to either pay in AED or foreign currency (USD, EUR, GBP). Always pay in foreign currency to avoid additional fees set by the merchant, on top of the standard foreign transaction charge.


Reversals do not count as payments. You are liable to pay the full outstanding balance as per the monthly statement.

What fees are you likely to pay?

Below are some of the credit card related fees that your bank might charge you with:

•  Annual fees
•  Late Payment Fees
•  Cash advance fees (using ATM)
•  Balance transfer fees
•  Foreign transaction fees
•  Card replacement fees

Bottom line and important tips

Pay as much as you can, as soon as you can, and always pay by the due date. If you do not pay the outstanding balance in full, pay the remaining balance as soon as possible. Don’t wait for the due date.

Always check your balance online through Online banking or Mobile banking. Remember that unpaid interest may put you over your credit limit.

To avoid paying your bill late, you can schedule recurring transactions or standing instructions, so you don’t have to remember to make your monthly payments.

Do not make purchases on your credit card that you can’t afford to pay back later. Spending within your means keeps your credit score healthy and will prevent you from falling into debt. If you realise you have a credit problem, don’t panic, but do act quickly and make a realistic budget and let the bank know that you want to pay. The bank may help to assist with providing you with a new payment plan.