UAE credit card issuers have worst reputation as coronavirus hits finances: Report
Credit card issuers have the worst reputation among businesses in the UAE, with nearly one in four residents saying that they are the least trusted of all in the sector, according to a new report.
The 10th edition of the Middle East Investment Panorama (MEIP) report included a survey of 1,000 UAE residents showing that 23 percent believe credit card issuers have the worst reputation, up from 18 percent in 2019.
With the coronavirus pandemic, officially known as COVID-19, likely to cause the worst global recession in nearly a century, credit cards, which often have higher interest rates than other financial products, are likely becoming targets of complaint from cash-strapped consumers.
“It is not surprising to see that trust has become such an important issue. Credit card companies have a reputational problem in the Middle East … While other financial providers in Canada and other countries are trying hard to help the working population during this COVID-19 crisis, we haven’t seen similar moves from card issuers in the Middle East,” said Nigel Sillitoe, the CEO of Insight Discovery, the authors of the report.
Recruitment companies had the second-worst reputation with 22 percent, followed by telemarketers, at 20 percent, then real estate agents with 13 percent, independent financial advisers at 9 percent, and banking advisers came fifth, with 8 percent.
Sillitoe believes credit card issuers need to change their focus to maintain their customer’s support.
“To regain their trust, credit card issuers should have a relook at their value proposition by exploring ways to prove they are out to help people manage their finances in these tough times,” he said.
Many credit cards in the UAE offer associated benefits with the card, such as lounge entry at airports, but have a higher annual percentage rate (APR), and are thus more expensive, than issuers in other countries.
“In my opinion certain credit card issuers should focus less on benefits (cash back schemes, fee golf, air miles, etc.) and reveal the true cost of owning a credit card by being more upfront about APRs,” Sillitoe explained. “Comparison websites in the Middle East are just as guilty as they list all the benefits and the monthly interest rate but rarely quote the APR.”
With the coronavirus’s devastating impact on the economy still yet to be fully realized, firms would do well to take note and alter their value propositions as customers look to save while jobs and wages come under pressure.
The UAE has had 5,365 infections of the coronavirus, with 33 dead. There have been 1,034 recoveries so far, the UAE’s Ministry of Health said Wednesday.