Monday, June 8, 2009

Dubai First; Is it Really a Credit Card?!?!


After a long absence, I am back. There has been many things that I wish to comment upon, but alas, time is precious and I am busy with so many things. Unfortunately, many of my tidbits are depressing and I would hate to share my misery with the rest of you as I am sure that you all have enough problems in your life.

Regardless, there is one bit of ranting that I would share that I find absolutely ridiculous. To me, it is humorous and might bring a bit of smile to your lips. After all, what is life without some laughter to relieve our stress and everyday worries. This is about the not so recent policy of Dubai First Credit Cards, which is a member of Dubai Group, which is a member of Dubai Holding, which is a semi-government entity owned by HH Sheikh Mohamed Al Maktoum, the Prime Minister and Ruler of Dubai. Let me begin by a little background.

Dubai Group launched the Dubai First Credit Cards in the second quarter of 2007. After all, credit cards were a lucrative business with many residents being offered free credit. The thinking I presume was why not get a share of the pie. As an employee of a sister company, our phone numbers were shared with the group and sure enough, I received the solicitation from their sales people from the very beginning. I agreed and was given a monthly spending limit of 40,000 AED which was fine from my end.

Now, I believe in the usage of credit cards to pay for my daily expenses instead of cash. I ensure that I pay the full amount by the end of the month (it does not reach 40,000 AED or else I would be in the poor house) in order to not be charged any interest nor extra charges. As I have a Citibank Skywards Credit Card, the Dubai First was used sporadically and my thinking was it would be my emergency credit card and that is what I have used it for. Thus, I would not receive monthly statements except when I conducted one or two transactions on it.

Anyway, recently when conducting an online transcaction, I decided to use it in order to ensure that my other credit card was not stored on the system. The amount was only 200 AED. Upon receiving the statement, I was surprised to find out that my credit limit had been reduced. Not by half! Not by 70%!!! Not by 95%!!! But rather from 40,000 to 500 AED (i.e. by 98.75%). I was amused and called up the customer service center.

Apparently, I was one of the lucky ones as some people's MONTHLY limits were reduced to 100 AED. This was due to their new policy due to the credit crisis. After all, they are related to a bank, thus their risk exposure is 100%. While the rationale makes sense from a risk perspective, the whole concept is ridiculous. That means that all of the customers (provided they have had their credit limit reduced like mine) would only be able to conduct one or two transactions per month which I am sure is not enough to sustain the financial group's operations. It defeats the whole purpose of having the credit card!!! It is a classical case of short-term thinking whereas the company wants to have its cake and to eat it too. Whomever is their leader should be able to present at world-wide conferences for exactly What NOT to DO?!! It will certainly provide entertainment to the real business community.

What happened with me? I have retained my credit card for two reasons. Firstly, I like the last 4 digits of my credit card number. They are extremely unique. Secondly, and more importantly, I am a founding member which might be able to retain some value in the long term as I received my credit card in their first year of operation. Thus, I would like to retain that distinction. Overall, it is a funny story and limited thinking, do u not agree?!?!?!

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