Expats split over credit cards Transactions not transparent, say some

This week’s online poll by Arab Times, dealing with the issue of credit cards, saw mixed responses from voters, with no single view dominating the general sentiment.

About 20 percent of the respondents, the biggest percentage of voters, felt credit cards lead to piling up of unbearable debt. This was also the opinion of community leaders in various social organizations that Arab Times spoke to with regard to the poll.

They felt that while credit cards help individuals at times of cash crunches, they also have their own downsides. “Credit cards are fueling an already growing culture of commercialism, where acquisition of commodities has become the very objective of life.”

Respondents recounted stories of several individuals who were reduced to poverty on account of accumulating credit-card debt. Most users of credit cards are very ignorant of how exactly to use credit cards, or what is the actual cost they entail by using credit cards. They don’t know the math on which the interest on payments is calculated.

People largely view credit cards as a means of gaining greater purchasing power. But it’s just like taking money from a money lender to buy your groceries or other items, people noted.

“Yes, it’s true that you don’t need to pay interest if you pay up within one month of the purchase. But a majority of people in the middle income group use credit cards to buy costly lifestyle items, the full price of which is far beyond the make of an average expatriate’s monthly salary. This renders them indebted to the bank for a long time, throughout which period the interest keeps accumulating.”

Enticing
Community leaders also blamed the changing values in the society, which is more about flaunting wealth and flashing premier gadgets for social status. “With these values seeping into the society, and advertisements bombarding people with enticing products every day, there’s an explosive mix that will impel people to live far beyond their means, sinking into the quagmire of debt up to a point when there’s no escaping it.”

Eighteen percent of the voters were angry that credit card transactions are not transparent. Interviewees who supported this view said that banks make you sign documents that are printed in extremely tiny fonts that 90 percent of the customers don’t bother reading through them fully.

Another 18 percent of the voters favored credit cards because it helps in making online purchases, giving them greater access to international products, or products that are not locally available. However, respondents who spoke to the Arab Times blamed the system of online purchase for favoring credit card companies. There are a few online stores that accept debit cards; however, a majority of them don’t accept them.

Yet, another 18 percent said they use credit cards only at times of cash crunches. 14 percent of respondents felt credit cards encourage spending, “because it gives users a false sense of being able to acquire things for free.

“There’s also a psychological effect, when you can get your shopping done just by swiping a card, instead of handing out currency bills, which some find more hard to do.”

Twelve percent of the voters were concerned about hidden charges in credit cards, though not many interviewees had much to say about that.


By: Valiya S. Sajjad Arab Times Staff

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