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Stuck in debt in the UAE?
It's 3 years today since I cancelled my credit cards & had NONE since.
Another 3 months I'll have finished my last liability payment, bringing to a close 2.5 yrs of smarter, efficient, stress-free living in order to be debt free.
Here's how I did it:
It's 3 years today since I cancelled my credit cards & had NONE since.
Another 3 months I'll have finished my last liability payment, bringing to a close 2.5 yrs of smarter, efficient, stress-free living in order to be debt free.
Here's how I did it:
First, know the facts.
See, the thing to remember - KNOW, in fact - is credit finance is a luxury, it's a want not a need, it's also a trap. They're not lending you money cuz you deserve a better life. They're lending it cuz they want your money long term.
See, the thing to remember - KNOW, in fact - is credit finance is a luxury, it's a want not a need, it's also a trap. They're not lending you money cuz you deserve a better life. They're lending it cuz they want your money long term.
P.S. This is NOT me arguing against credit facilities, lord knows there are many underprivileged/low/middle income families who need this or they'd starve.
It isn't a shaming post. My dad went into debt simply to pay for my education and future. I know why it's critical.
It isn't a shaming post. My dad went into debt simply to pay for my education and future. I know why it's critical.
Second: Look inward.
I ran up 100s of thousands of AED in credit card and loan debt because I wanted to 'live the Dubai life'. Not the one that matters but the one portrayed in ads and on social media. I wanted the glamour. So I racked up a ton of debt 'looking' the part.
I ran up 100s of thousands of AED in credit card and loan debt because I wanted to 'live the Dubai life'. Not the one that matters but the one portrayed in ads and on social media. I wanted the glamour. So I racked up a ton of debt 'looking' the part.
By 2015 I realised I was in deep. So my solution? I went to another bank who consolidated all my debt and gave me ANOTHER loan and a card after buying it up from all my previous banks. Now I could pay it all back in one payment.
But I still wanted the 'life'. With this apparent
But I still wanted the 'life'. With this apparent
new 'freedom' I thought I was free. High new salary made it easier to live 'that' life
Until it all crashed. Job loss, dad's health cost, other issues, I couldn't fool myself any more. And so, after the typical threats and calls from banks I decided I needed help managing this.
Until it all crashed. Job loss, dad's health cost, other issues, I couldn't fool myself any more. And so, after the typical threats and calls from banks I decided I needed help managing this.
I reached out to a close friend who worked in debt recovery and management. He advised me to first decide if I really wanted to be free. I was rock bottom even though my life 'looked' perfect on social media.
I broke down and screamed yes.
I broke down and screamed yes.
Step 1:
I listed all my debts. Each bank, each package, each product, the total I borrowed, the amount I spent, the amount I needed to pay back, the interest (collective and separately), and the monthly dates.
Now I knew how much. It shocked me but now I had a number.
I listed all my debts. Each bank, each package, each product, the total I borrowed, the amount I spent, the amount I needed to pay back, the interest (collective and separately), and the monthly dates.
Now I knew how much. It shocked me but now I had a number.
Step 2:
List the biggest luxuries you have.
Expensive apartment in a high-end district for no reason other than vanity?
Overuse of Careem/Uber etc
Overuse of Zomato, Talabat etc
Brunch/drinks out with mates every single weekend
Other entertainment luxuries
New branded clothes
List the biggest luxuries you have.
Expensive apartment in a high-end district for no reason other than vanity?
Overuse of Careem/Uber etc
Overuse of Zomato, Talabat etc
Brunch/drinks out with mates every single weekend
Other entertainment luxuries
New branded clothes
If you only take the above listed stuff, it is a staggering monthly amount. And ALL of the above can be avoided just by making a decision.
Now, you've figured out where to cut down. Next:
The banks.
Now, you've figured out where to cut down. Next:
The banks.
Most important thing to do is contact the bank. Don't avoid. Biggest mistake is avoiding calls. The only reason they're calling is to get money, not YOUR money but money because the collectors are paid commissions per month.
However, you're not paying so you're on the list.
However, you're not paying so you're on the list.
If you can't pay, you can't pay. It's fine. Find the solution and the only solution (other than the notorious one where people flee from this place, don't do that because now these guys can come to your home country and that's nasty business) is to go to the banks and negotiate.
Step 3: The negotiation.
Banks want their money back. You just need to be transparent that you can't pay X per month any more but you want to pay. They'll hoo and haa and tantrum but that's for effect not cause. Be calm, DON'T stress or give in to despair.
Banks want their money back. You just need to be transparent that you can't pay X per month any more but you want to pay. They'll hoo and haa and tantrum but that's for effect not cause. Be calm, DON'T stress or give in to despair.
They'll come back to you eventually saying one of two things:
1. Consolidated monthly payments of X divided by 5 months instead of 36
2. Extended payment plan of X divided by 48. Or Y divided by 24. Whatever you can manage.
Take the payment plan if you can.
1. Consolidated monthly payments of X divided by 5 months instead of 36
2. Extended payment plan of X divided by 48. Or Y divided by 24. Whatever you can manage.
Take the payment plan if you can.
Step 4: Discipline.
This is the biggest and most important bit: don't be daunted by the timeline. I took the 3 year payment plans options. In my head it seemed like SO long to keep paying and having my life on hold. But today, 2.5 years later,
This is the biggest and most important bit: don't be daunted by the timeline. I took the 3 year payment plans options. In my head it seemed like SO long to keep paying and having my life on hold. But today, 2.5 years later,
With no credit cards for 2.5 years, and just 3 payments left on my last loan, and with ZERO IMPACT to my quality of life and my social life with good friends, and with me spending MY OWN money and not credit, I've never been happier and more free.
It's possible. If you WANT it.
It's possible. If you WANT it.
In closing, I've missed nothing by not having a credit card. Debit cards in here have gr8 offers, points, rewards. I've enjoyed a LOT. Hotels, airlines, all give benefits now.
I'm ready for anecdotal advice but please speak to actual specialists for YOUR cases. :) /end
I'm ready for anecdotal advice but please speak to actual specialists for YOUR cases. :) /end
Addendum:
Don't miss payments for more than 3 months. Banks can and WILL cash your cheque. You'll be in trouble.
You don't need to give the bank a cheque at all. No matter how much the sales guy insists, no matter how much he says it's procedure. You don't need to. :)
Don't miss payments for more than 3 months. Banks can and WILL cash your cheque. You'll be in trouble.
You don't need to give the bank a cheque at all. No matter how much the sales guy insists, no matter how much he says it's procedure. You don't need to. :)
