Almost 50% of UAE residents buried in debts: survey Savings threatened by frequent shops-on-sale?

DUBAI – Living and working in the UAE is hard enough for some; but, having multiple debts is, perhaps, the worst and aggravating scenario one can ever live up to, here, where almost everything attractive seems cozy yet expensive.

Recently, a survey was concluded in the UAE where it stated that five in 10 people (46.7 percent, or approximately 4.3 million) are in debts. It also revealed that 12.8 percent are actively seeking for a loan.

The survey conducted by Payfort, a company owned by Amazon, stated that three in 10 residents in the UAE cannot save money at all.

As of August, this year, the total amount of individual’s debt is pegged at AED 332.8 million, a decrease of 5.8 percent from July and 3.5 percent from last year.

The survey did not mention why these residents keep on outsourcing money.

In a place like Dubai, where almost every shop offers glaring discounted products, it is not hard to know these cases.

Having loans from banks is also as easy as ticking a box in a paper.

While many enjoy the money they borrowed, a lot are struggling to pay it back.

Article 401 of the UAE Penal Code says that an individual who issues a cheque with insufficient balance – causing the same to bounce – can face imprisonment of one month to three years, or a fine of a minimum of AED 1,000.

Issuance of a bounced cheque is deemed a punishable criminal act.

The Philippine missions have also been doing series of financial literacy seminars both in Dubai and the Northern Emirates and Abu Dhabi to educate the Filipino community about the predicaments of being buried in debts.

According to bankruptcy.findlaw.com, the best way to avoid never-ending pressure from creditors is to repay overdue bills and not let the bills become overdue.

April Carillo, who has been in the UAE for a decade, told Kabayan Weekly that she has not been able to save throughout her time in the country.

“My salary goes straight to my expenses here and the rest is sent to the Philippines for my family,” the mother of two said.

According to the Filipina, at least 60 percent of her salary is spent on expenses, such as electric bills, rent and other payments in the UAE.

The Sharjah resident said that the remaining 40 percent is sent to the Philippines every month.

“There are times I get to save AED 200 but it’s not every month. However, it also gets spent eventually by the end of the month due to sales,” Carillo added.

She hopes that she gets to save now that her daughter has joined her in the UAE. She only has one more child to support financially back home and is determined that things will get better financially for her family. (With a report from Jekah Carillo)

Tips to avoid piling up debts

• Pay with cash whenever possible

• Stay with your spending limits

• Avoid impulse purchases

• Avoid ‘buy now, pay later’ offers

• If you can’t avoid, use lender that offers the lowest interest rate

• Avoid applying for more than one or two credit cards at a time

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