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Dealing with money can sometimes be challenging, especially if you don’t follow good financial discipline. There are some fundamental principles that can be followed to ensure that you are able to meet all your financial obligations. These principles will assist you to regularize your finances and improve your credit score with Al Etihad Credit Bureau (AECB) which is an important criteria when it comes to needing a loan or a credit card. These principles will also help reduce your debts and enable you to manage your finances better, avoiding paying high interests and late fee charges.


Listed below are some of the key principles:

1. Borrow within reasonable levels
Always ensure that you only borrow what you can afford to pay back after paying for your basic needs e.g. education, food, utilities, housing etc. Have enough disposable income, after paying your financial obligations, to meet all your living expenses.

2.Do not take extra debt to buy goods / services that you do not need or borrow to invest in speculative activities

Taking loans often to buy goods which are beyond your means, will result in increasing your financial burden in the long term. Also, do not borrow to invest in speculative activities where you could incur a loss and lose your capital

3. Always pay on time, as per your due date

Paying your monthly debt obligations on time will ensure that you do not incur additional charges / late fees, which could further increase your debt exposure.

Paying on time will also ensure that your credit history with the Al Etihad Credit Bureau remains strong, enabling you to borrow in future when the need arises.

4.Reduce high interest rate debt or long term unsecured debt

Whenever you have extra funds available try to reduce exposure to high interest debt or reduce the outstanding tenor of debt instead of taking on more debt

5.Be open and transparent with your Bank

There could be circumstances because of which you are temporarily unable to meet the existing level of commitments with Banks. In such a scenario, always reach out to your Bank and explain your situation in a very transparent manner, seeking assistance.

CBD always encourages its customers to reach out to the Bank if they are facing financial difficulty and need assistance. You can contact us on the following email and explain your situation in case you are in financial distress.


Below is the schedule of charges on Loans and Credit Cards in case of default.

Product Interest % - Loan
Mortgage Loan2% (max 700)
Ijara Finance2% (max 700)
Personal Loan2%(Min 50 - Max 200)
Tawarruk Finance2% (Min 50 - Max 200)
Vehicle Loan2% (Min 50 - Max 200)
Murabaha Finance2% (Min 50 - Max 200)

Product Interest % -Credit Cards Over Limit Fee  - CCLate Payment Fee - CC
Credit Card3.45% - Retail Transaction  AED 275  AED 240
 3.49% - Cash Transaction  



Before you get started

Before you start planning on how you can improve your finances, you need to know how much money you spend on an average every month on the below key expenses:

  • Monthly rent
  • School education expenses
  • Monthly living costs
  • Credit card bills
  • Insurance (life, car, etc.)
  • Car maintenance costs, fuel costs as well as public transport
  • Leisure expenses like shopping, eating out, ordering food, gym memberships etc.
  • Other big ticket expenses like holidays, travel etc.
  • Investments if any
  • Miscellaneous expenses
Budget Planner

To help you log in your monthly expenses you can start by using a simple excel sheet and tracking and categorizing all your spends. You can also use several free budget planners such as the Moneyhelper Budget Planner or the Excel spread sheet from Money saving Expert

Just the simple act of tracking and monitoring your monthly expenses will work wonders in starting to build discipline in your spending habits.

Get your budget back on track

If you realize you are spending more than you are earning, you need to identify areas where you can reduce your expenses.

As a start, identify wasteful expenditure and start reducing your spends on the same. This might be as easy as making your lunch at home or cutting down on the number of coffees you have at cafes or cancelling a gym membership and instead working out at home or at the park. Once you start tracking your expenses, you will easily realize what you can cut down on and save more.

For most UAE residents, rent, education and household expenses constitute the majority of their monthly expenses. If you are struggling with your expenses, you need to take a hard look at all 3 categories:

Rent – Can you look at downsizing your home and reduce your monthly rent?

Education – Can you look at a cheaper school without compromising on the quality of the education?

Household Expenses – Identify and cut-out wasteful and unnecessary expenditure

Finally, cut down on impulsive spending. Follow the below 3 step rule before making any big or impulsive purchase. Ask yourself these 3 questions and only buy if you answer Yes to all three.

  • Do I really need it?
  • Can I afford it?
  • Can I live without it?

Pay off loans and credit cards

If you have loans or owe money on credit cards it usually makes sense to pay off the debt that charges the highest rate of interest first. Examples include:

  • Credit cards
  • Personal loans from the bank,
It is important to make sure you don’t break the contract terms of your agreements. So even if you’re focusing on paying down another debt, you must cover at least the minimum payment on any credit cards and your monthly required payments on loan agreements.

Set a savings goal

Instead of letting your expenses dictate your monthly savings, set a monthly savings goal and then plan your expenses around it.

Instead of calculating your savings as

Income – Expenses = Saving, turn the equation around to

Income – Savings = Expenses

This will help create a financial discipline and help you save money on a regular basis and build a financial cushion for any unforeseen emergencies in the future.

Investing your savings

As your savings start to grow, you should put more money into investments and retirement plans to ensure you get a regular income for you to live comfortably, even after you stop working. Remember, the earlier you start investing, the better will be your long term returns.

Contact us:

You may write to us on and our team will get in touch with you.


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