Question: I will be canceling my residency visa and returning to my home country soon. I have outstanding credit card dues that I intend to pay off through monthly payments from my home country. How can I do this?
Answer: In response to your inquiry, it is understood that you are closing your bank accounts and leaving the UAE permanently, with no intention of returning on a residency visa. Therefore, the relevant provisions are governed by Notice No. 3692/2012 issued by the Central Bank of the UAE, which pertains to General Terms & Conditions and Loan Agreements texts drafted and approved by the Emirates Bank Association.
In the UAE, a credit card facility provided by a lender to a borrower may be subject to the rules and regulations governing the terms and conditions of a personal loan. When a credit card facility is extended to a borrower, the lender typically obtains a signed loan agreement or application form from the borrower, outlining the terms and conditions related to the credit card facility.
Failure to make three consecutive monthly payments or six non-consecutive payments on a credit card may be considered an event of default. This is stipulated in Article 4(4) of the Personal Loan Agreement format of Loan Agreements Formats Approved by the Central Bank of UAE, which states:
“The loan elapses, and all the instalments, interests, and any other fees and expenses become due and payable immediately without having to give any notification or any court ruling and without prejudice to any other rights of the bank according to this agreement or in accordance with the law – in the event that the borrower failed to pay three consecutive instalments or six non-consecutive instalments of the monthly instalments without approval of the bank.”
Based on this legal provision, you are obligated to repay the outstanding instalments to the lender. In the case of non-payment of credit card instalments, your lender may initiate civil legal proceedings against you in court to recover the outstanding debt along with associated costs. If the court’s judgment is not in your favor, the lender may proceed with execution proceedings, including requesting a travel ban and issuing an arrest warrant.
Given your impending departure from the UAE, you should contact the lender from whom you obtained the credit card facility and inform them of your plans to leave the UAE permanently and not return. Additionally, inform the lender of your commitment to promptly settle the credit card payments on or before their due dates while residing in your home country.
Upon receiving this information, the lender may provide guidance on payment options for the outstanding amounts. If the lender agrees to your proposal to make payments from your home country, you can arrange to pay the credit card instalments by either transferring funds directly from your home country bank account to the credit card account/card number, or by using telegraphic transfer (TT) services from a bank or financial institution in your home country to the credit card account/card number. Be sure to notify your lender of these arrangements.
Furthermore, it is advisable to request a clearance letter or no-due certificate from the lender once you have settled all outstanding instalments related to the credit card facility provided by them.