Credit card interest and fees in the UAE explained

Each UAE bank sets its own credit card interest rate: the Central Bank sets no cap on the rate, only a rule against excessive rates. You pay no interest on purchases if you clear the full statement balance by the due date. Cash advances can be charged interest from the day you withdraw, and the late payment fee is capped at AED 230 plus VAT.

Key takeaways

• Pay the full statement balance by the due date and you pay no interest on purchases.
• Banks set their own card interest rates; the Central Bank has no numeric cap but bars excessive rates.
• Cash advances can be charged interest from the day you withdraw, with no interest-free period.
• The Central Bank caps five card fees, including the late payment fee at AED 230 before VAT.
• Your card's Key Facts Statement and monthly statement show the rate and every fee that applies.

How credit card interest works

Card interest is charged on what you leave unpaid after the payment due date. Cash advances are the exception and follow their own rule. Each month your statement shows the balance, the minimum payment and the due date, and what you pay by that date decides whether interest applies.

Statement balance paid in full

Pay in full, no interest

Banks must not charge interest on a credit card balance (excluding cash advances) when the statement balance is paid in full by the payment due date.

Paying in full: no interest on purchases

If you pay the full statement balance by the due date, the bank may not charge interest or finance fees on it. This is a rule in the Central Bank’s Consumer Protection Standards (clause 7.1.5.14), not a bank offer, and it applies to cards from every bank and finance company the Central Bank licenses.

How long a purchase stays interest-free depends on when you make it. A purchase made just after a statement date appears on the next statement, so you have a whole billing cycle plus the gap to the due date before payment is due. A purchase made just before the statement date gets only the gap. Your statement shows both the statement date and the payment due date.

Paying part of the balance

If you pay only part of the statement balance, interest is charged on what remains. The Standard says that after a part payment, interest or finance fees are worked out on the outstanding balance for the period from the contractual due date to the date you pay it. Cash advances are excluded from this wording too.

Clause 7.1.5.13 adds that unpaid card balances must be charged on the reducing balance method: interest is calculated on the balance you still owe, so each repayment lowers the amount that interest is charged on.

When you take a card, the bank must explain how it calculates interest, including the date from which interest is charged, and give you an example of the calculation (clause 2.1.3.4). Look for that example in your card’s Key Facts Statement or terms. A bank’s own description can differ, for instance in the date it counts interest from, so before you rely on any estimate, including the one further down this page, read your own bank’s example.

Monthly and annual rates

A card rate can be quoted per month or per year. A monthly rate multiplied by 12 gives the simple annual rate, so 3% a month is 36% a year. Your monthly statement must show the annual interest rate charged, separately from the other items, and the annual rate applied during the period (Consumer Protection Standards, clause 2.1.3.19).

The Annual Percentage Rate (APR) is a different figure. Lenders must disclose it, and it includes the interest and the cost of other fees compounded over a year, so it is higher than the simple annual rate when fees apply and is the better single number for comparing two cards. Our guide to flat and reducing rates explains how the APR works.

No interest on interest

Lenders may not charge interest on accrued interest on any consumer credit product, cards included. The rule is in clause 7.1.5.12 of the Consumer Protection Standards, which cites Article 121 of Decretal Federal Law No. (14) of 2018 on the Central Bank. Banks must tell you about this rule, and your statement must list all the interest charged, so you can check each month’s charge.

Who sets your card’s rate, and where to find it

Your bank does. Regulation 29/2011 leaves the interest rate on unpaid card balances to each bank or finance company, which lists its rates in a table and sends a copy to the Central Bank.

Who sets the card rate

Set by each bank

Each bank or finance company sets its own interest rates on personal loans, car loans, overdraft balances and unpaid credit card balances, lists them in the rates table of Annex 1 to Regulation 29/2011 and sends a copy to the Central Bank for publication.

No Central Bank cap on the rate

There is no maximum card interest rate in Regulation 29/2011, its fee table or the Consumer Protection Standards. The Standards say only that licensed institutions must not charge excessive margins or interest rates (clause 7.1.5.11), without a number or a test for what counts as excessive.

Because each bank sets its own rate, the way to find a lower one is to compare the documents each bank must give you.

Finding your bank’s rate

Three documents show what a card costs:

1. Before you apply: the Key Facts Statement. The bank must give you this summary before it provides the card. It should be the first document in the sales process, and you sign to confirm you received it before you sign the contract. See how to read a Key Facts Statement.
2. The bank’s schedule of fees. It must be on display in every branch and on the bank’s website, including any third-party fees.
3. Your monthly statement. It shows the annual rate charged and every fee, itemised and totalled.

The method is the same for any bank: look on its website for the card’s Key Facts Statement, or ask a branch for a copy.

As one example, Mashreq’s credit card Key Facts Statement (KFS_Cards_05 2026, opened on 13 October 2026) gives a retail and cash interest rate of 46.20% a year, fixed, which its worked example shows as 3.85% a month (3.85% × 12 = 46.20%). That is one bank’s figure on that date, not a market rate, and it can change.

Cash advances

A cash advance is cash you take out with a credit card, for example from an ATM. It is charged differently from a purchase in two ways: interest can run from the day you take the cash, and the bank can charge a fee for the withdrawal.

Interest on a cash advance

From the transaction date

Interest or finance charges on a credit card cash advance may be applied from the transaction date until final repayment; the interest-free treatment for balances paid in full by the due date excludes cash advances.

Because the pay-in-full rule excludes cash advances, clearing your statement on time does not cancel the interest on cash you withdrew. It can run from the day of the withdrawal until you repay it.

The cash advance fee is not one of the fees the Central Bank caps. Each bank sets it in its own fee schedule, and any fee outside the capped table needs the Central Bank’s approval. Mashreq’s Key Facts Statement, for example, gives its cash advance fee as 3.15% or AED 210, whichever is higher, including VAT. On a withdrawal of AED 1,000, 3.15% would be AED 31.50, which is lower than AED 210, so the fee would be AED 210 before any interest.

Check the order in which your payments are applied, too. The same Key Facts Statement applies repayments to interest, fees and instalment plans first, then purchases, and cash advances last, so a cash advance balance can keep building interest until everything ahead of it is paid. More in the glossary: cash advance.

The five card fees the Central Bank caps

The Central Bank’s fee table, Appendix 2 to Regulation 29/2011, sets a maximum for five credit card fees. Every cap is stated before VAT, which is added on top at 5%.

The VAT column is our arithmetic: each cap × 1.05. For the late fee, AED 230 × 1.05 = AED 241.50.

Maximum credit card late payment fee

AED 230

The late payment fee on a credit card is capped at AED 230.

Three points about the table:

• The caps are maximums. The Central Bank says it supervises banks so that they do not automatically default to the caps where their actual costs are lower, and that banks must charge less than a cap where that is appropriate.
• Your monthly statement itself is free. The AED 45 cap is for a duplicate. Card statements must be issued at least monthly at no charge.
• The letter fee matters when you close a card. A no-liability letter confirms you owe nothing; see how to cancel a card and get a clearance letter.

A missed payment has consequences beyond the fee: see what happens if you miss payments.

Fees each bank sets

Any card fee outside those five, such as the annual fee, an over-limit fee, the cash advance fee or a foreign currency charge, has no Central Bank cap. The bank sets it, within these rules:

• A bank may charge only the fees in the Central Bank’s table or fees the Central Bank has approved in writing. A new uncapped fee, or a change of more than 5% in one, needs approval in advance.
• The bank’s schedule of fees must be on display in its branches and on its website.
• The bank must disclose every fee that applies, explain how it is calculated, and say whether it is charged once or recurs. For a recurring fee it must say how often and for how long.
• The bank must give you at least two months’ notice before it changes a fee.

Notice before a fee change

2 months

Lenders must give customers at least two months' notice before changing commissions or fees, and may not change a loan's terms during its tenor unless the borrower agrees in writing.

Annual fee

Each bank sets its annual fees card by card, and some cards carry no annual fee. Mashreq’s Key Facts Statement, for instance, lists some of its cards as “Free for life” and others with a recurring annual fee. The bank must tell you whether a fee is charged once or recurs, and how often, so its documents show whether you pay once or every year. A bank can also choose to waive a fee, as explained below.

Over-limit fee

The bank must tell you that the card cannot exceed its authorised limit, and that a transaction taking it over the limit may be rejected and may incur a fee. That fee has no Central Bank cap, so check the amount in the Key Facts Statement.

Foreign currency transactions

When you pay in another currency, your statement must show the exchange rate applied to each foreign currency transaction. Any margin or fee the bank adds on foreign spending is set by the bank and listed in the Key Facts Statement and fee schedule.

Instalment plans and balance transfers

Turning a purchase into an instalment plan, or moving a balance from another card, can come with its own fees, rate and terms for closing the plan early. They are not among the five card fees in the Central Bank’s table, and the Key Facts Statement shows them. A balance transfer can lower the rate on a balance you carry, at a cost: see credit card balance transfers.

Worked example: what one month costs

Worked example

Statement balance AED 5,000, card rate 3% a month

The balance and the rate are illustrations: 3% a month (36% a year) is a figure chosen for the example, not a market rate. The balance is all purchases, with no cash advances and no new spending. We assume AED 1,000 is at least the minimum payment due and that the card’s terms charge no late fee once the minimum is paid. Interest in step 2 follows the wording of the Consumer Protection Standards: interest from the due date on the outstanding balance.

1. Pay AED 5,000 by the due date. The full statement balance is paid, so no interest is charged on it: AED 0.
2. Pay AED 1,000 by the due date and the remaining AED 4,000 30 days later. Annual rate: 3% × 12 = 36%. Interest: AED 4,000 × 36% ÷ 365 × 30 = AED 118.36.
3. Pay nothing by the due date. The late payment fee can be up to AED 230 plus 5% VAT: AED 230 × 1.05 = AED 241.50. Interest on the unpaid balance comes on top.

What you pay by the due date	Cost for the month
The full AED 5,000	AED 0
AED 1,000	About AED 118 in interest
Nothing	Up to AED 241.50 in fees, before interest

On these figures, paying in full costs AED 0, a part payment about AED 118 in interest for the month, and a missed payment up to AED 241.50 in fees before interest.

Your bank’s result may differ. Its Key Facts Statement or card terms show the method it uses, including the date it counts interest from, and its fee may be lower than the cap.

Minimum payments

The minimum payment is the smallest amount the bank asks you to pay by the due date. Paying only that leaves the rest of the balance to be charged interest. The Central Bank sets no minimum percentage: each bank’s terms say how its minimum is worked out.

What your statement must show

Mandatory warning

Credit card statements must show how long it would take to clear the balance by paying only the minimum, the minimum due, and a warning that minimum-only payments cost more and take longer.

Every card statement must show how long it would take to clear your current balance if you paid only the minimum and spent nothing more, with the total interest that would cost. It must also show the minimum due and a warning that paying only the minimum costs more in interest and fees and takes longer. Read those lines before you choose how much to pay. More in the glossary: minimum payment.

Can a bank waive a late fee or other charge?

Yes, but it is the bank’s choice. Central Bank guidance under Regulation 29/2011 says banks may not charge fees outside the Central Bank’s table without its written approval, but are free to reduce or exempt customers from certain fees and charges at their own discretion. A waiver is not a right.

If you want a fee reversed, ask the bank. Explain what happened, for example a payment you sent on time that arrived late, and ask for any reversal to be confirmed in writing.

A fee above a Central Bank cap, a fee that was never disclosed, or a fee change without notice is different: that is a complaint, not a favour. Start with the bank: your card statement must give its complaint channels and the time it takes to respond. See your rights as a borrower and how to complain about a bank, including the next step if the bank’s answer does not settle it.

How to pay less interest and fees

The rules above point to a few habits that keep card costs down:

• Pay the full statement balance by the due date. The pay-in-full rule then removes interest on purchases.
• If you cannot clear it, pay as much as you can above the minimum. Interest runs only on what remains.
• Set up an automatic payment of the full statement balance if your bank offers one, so a busy month does not turn into a late fee. A payment from another bank can take time to arrive, so check your bank’s cut-off.
• Avoid cash advances. Interest can start on the day you withdraw, and the bank can charge a fee on top.
• Check the fee lines on each statement. Fees must be itemised and totalled separately, so a charge you did not expect is easy to spot and question.
• Compare Key Facts Statements before you switch cards. Look at the annual rate, the APR, the annual fee, and the cash advance and foreign currency charges.
• Look at the whole balance. A balance transfer may lower the rate on what you owe, and debt consolidation covers wider options for several debts.

Islamic cards replace interest with a profit structure or fixed fees, and some of their charges work differently: see Islamic credit cards. For eligibility, see the minimum salary for a credit card, and for every topic on cards, the credit card guides.