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If you activate several new cards, apply for a personal loan or carry a high debt, your limit could be cut by a suspicious credit-card issuer wary of a customer who may be facing a financial crisis.
Some credit-card issuers in the UAE are tightening rules as the coronavirus pandemic continues to put millions of jobs around the world at risk.
While some customers have received notices from banks that their spending limits have been reduced, some issuers have imposed the cuts without prior notice.
“Dear customer, based on your card usage, we have made a change to the credit limit of your FAB credit card. All other benefits remain unchanged,” First Abu Dhabi Bank (FAB) says in a message sent to customers seen by Zawya.
Another credit card provider, the National Bank of Ras Al Khaimah (RAKBANK) informed a select number of customers that their maximum card spend has been capped to 5,000 UAE dirhams.
The bank told Zawya that the move is a result of the latest “data analysis” that they have undertaken on customers’ card expenditures. The company, however, stressed that the reduction in card spending limits has not affected 86 percent, or around 230,000 of its customers.
“The customers who had limit reductions were largely those that had fairly high limits previously and had not been using our card to any great extent. Around 6,000 customers had not even used our card at all in the last six months,” the bank said.
While this is not the first time adjustments are carried out, the bank admitted that the coronavirus pandemic has been one of the factors that led to the recent cuts.
The bank had earlier reported a 43.2 percent decrease in its consolidated net profit for the first quarter of the year due to the coronavirus outbreak. It pointed out that between January and February 2020, the bank had an “exceptional” performance “until the events around COVID-10 began to unfold.”
No notice
“I have just learned that my bank has lowered my credit limit from more than 30,000 to 22,000 UAE dirhams,” said Lenny Cole, a UAE expatriate, whose company has recently cut employees’ salaries by 10 percent.
“I had no idea they lowered my limit until I called them up to enquire about my credit card a few weeks ago,” she added.
The UAE Central Bank has said that the country’s banking sector is well-positioned to manage the economic shock of the coronavirus pandemic.
The government has been proactive in extending support to businesses impacted by the health crisis.
As of the first week of April, the country doubled the size of its stimulus package to 256 billion UAE dirhams ($69.7 billion), enabling banks and other financial institutions to provide loans and defer borrowers’ debt payments.
(Reporting by Cleofe Maceda; editing by Seban Scaria)
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