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Credit cards are behind majority of expat ‘skips’

A new report says most defaulting expats leave credit card bills behind, and the largest group of defaulters is Indian.

May 16, 2010 1:10 by



Incidences of people leaving the UAE because of credit card default recorded a sharp rise between 2004 and 2009, reports Emirates Business 24-7. The paper quotes a report that says 30 percent of expats leaving because of debt in 2004 owed money on credit cards; that figured had climbed to 66 percent by Q3 2009. The “Skip Report” was created by Orion Analytics, who analyzed bank records.

“The sudden shift cannot be attributed to tightened bank lending policy, since the commercial banking sector did not reorient lenient lending policies till well into the recession, when both credit card and loan defaults rose in an unprecedented manner,” says the report.

“Increased credit card activity, in fact, epitomized the boom years of the economic upswing. Banks set few conditions for extending the service and in most, a salary account was enough to issue credit cards. The pattern shows that card issuance increased around 2003, and defaults started registering an increase the following year onwards,” it says.

In keeping with the demographics of the region, the report says Indians, Pakistanis, and Filipinos are the leading nationalities in terms of skipping.



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12 Comments

  1. AP on May 17, 2010 9:42 am

    Since most workers in the country are from these countries (India, Pakistan and Phillippines) obviously the default number looks more. But one needs to see proportionately. If 1000 Indians default out of a million v/s 10 Chinese default out of 1000, then the chinese percentage is more. One has to consider it in relative measure, not absolute.

     
  2. Miss Anne Thropic on May 17, 2010 10:54 am

    Perhaps if the banks here encouraged the use of debit cards rather than constantly harassing customers with credit card offers, there’d be less debt and people might be encouraged to be more financially responsible and quit spending money they don’t have.

    But banks are not fans of debit cards as they don’t make them any money…

     
  3. raj on May 17, 2010 11:37 am

    If skipping is related to nationality, then why these same banks is not having similar crisis in India ?
    It should be the problem with the banking system here – which is having different policies for nationals & expats, & all the hiddern costs would be on the expat which forces him to either default or skip.

     
  4. Andrew on May 17, 2010 12:10 pm

    AP clearly doesn’t understand the last paragraph.

     
  5. ishaq ibrahim khan on May 18, 2010 6:15 am

    the behavior of bank is also responsible for example they never agree for any settlement and the harassment specially RBS collection department cheating costumers and dubious charges are the reason for defaults there is no rule for the banks to settle the cards if consumer lands in trouble so he thinks its better to escape

     
  6. Aquilles Brigido on May 18, 2010 7:04 am

    Identifying those nationalities as the major defaulters, does that make the bank collectors the right to treat the borrowers as criminal, to intimidate, harrass and threat of jail as the first resort? Also, does the banks gave these collectors the right to be abusive towards these collectors.

    After all these banks with credit card are really shoving these cards to the account holders face…

     
  7. Khalid on May 18, 2010 1:18 pm

    Skipers, are indians and other asians,what a study by Emirates business.I guess the Emirates business 24-7 has an easy access to the credit cards companies in gathering information about those nationalities, but forgets the defaulter’s nationalities who added fuel to the recession and credit crises in Dubai specially at the time of the real estate boom, compare a German, British, Iranian,American or any other westerner national’s debts to an Indian,Pakistani or Philipino.
    apart from that banks were offering credit cards to anyone and everyone like a pigeon closing its eyes when seeing the cat coming and thinking that the cat is gone.but the result everyone knows in the end.

     
  8. reck on February 25, 2011 4:37 am

    Those bank employees in the UAE & Qatar lures those expat asians – that’s the truth! After the loan received, interest rates bloom! How can those poor expats will continue paying them! For sure, skipping is the remedy.
    So the blame should not be given to defaulters. The banks shall not transact with collecting agents to collect debts. They should stop harassing poor expats who has no capacity and jobless to repay them. Instead change bank policies and do not lend money to expats!
    Lots of expats now in a dilemma. They cannot work abroad because banks filed a travelling ban. Tell me, how those defaulters can repay the banks? If only the banks will lift all the travelling ban to all defaulters…atleast maybe 70% of the defaulters can work and travel abroad to repay those debts! The banks should think about it!

     
  9. black asian on February 25, 2011 4:45 am

    I AGREE WITH RECK’S COMMENT….
    1) THE BANK SHALL THINK ABOUT NEW POLICIES IN MONEY LENDING.
    2) CANCEL TRAVEL BAN TO BANK DEFAULTERS. (THE CREDIT WILL BE FOR BOTH PARTIES) LET EXPATS FIND JOBS TO GCC COUNTRIES AND QATAR SO THAT THEY CAN EASILY REPAY THEIR DEBTS.

     
  10. brownish on February 25, 2011 4:55 am

    What a good idea Reck!
    And BLACK ASIAN!
    I think it would be a good option for those banks to consider your opinions!
    70% or say 60% (not bad) repayment to banks maybe gain to lift travel ban against defaulters.

     
  11. san on February 25, 2011 5:01 am

    I agree to Brownish.
    It is time to stop banning those defaulters in entering different countries. How can they repay the banks if they will jailed them.
    In time like this, uprising in Libya and different Arab countries; many workers don’t have any chance to those countries to work. Where they will go to work?

     
  12. wee itar on February 26, 2011 1:55 pm

    you moron… i borrowed the money from you because i didnt have it myself.. you still got plenty and i still haven’t got any..

     

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