UAE to increase card fees for foreign transactions: Here's how expats can avoid extra charges

Time of India

2 days ago

UAE expats may face higher charges on international card use starting September/ Representative Image
TL;DR
From Sept 22, UAE banks will raise fees on international card use to 3.14%, impacting travel and global online purchases.
Expats sending money home or spending abroad will see higher charges on every swipe.
There are ways to reduce costs, but only if you know where to look.
Living in the UAE often means your life spans borders, you earn dirhams here, but spend and support back home or elsewhere. Whether it's booking flights, sending gifts to family, or shopping online in another currency, using your UAE-issued card is part of the routine.
But from September 22, that routine gets more expensive.
Several UAE banks are updating their international transaction fees. The charge on every card (debit and credit cards) purchase or ATM withdrawal made outside the country, or in a foreign currency, will rise to 3.14%, up from the current 2.09%. That's a full percentage point higher than what most expats currently pay.
For many, that's not just a one-off charge, it's a recurring cost on everything from remittance-related services to travel spending.
Why This Matters to Expats More Than Most
For UAE Expats, international spending is about to get more expensive. This fee hike might seem like a small number on paper, but over time, it hits harder for expats who regularly:
Book flights for family visits
Use UAE cards for school fees abroad
Shop online in foreign currencies
Send money via platforms that use card payments
Withdraw cash while travelling or visiting home
If you're sending AED 3,000 to a relative using a platform that charges your card in dollars, expect to lose AED 94.20 to card fees alone. It adds up.
What's Behind the Fee Increase?
The 3.14% charge includes two parts:
1% – taken by global card networks like Visa or Mastercard for currency conversion
2.14% – added by your local bank as a processing fee
These rates aren't new globally, but the adjustment brings UAE fees closer in line with international benchmarks.
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Banks say the change reflects rising operational costs. But for cardholders, especially expats managing cross-border expenses, it just means more money out the door.
How You Can Cut Down on These Charges
While you might not be able to avoid the new fees entirely, here are ways to spend smarter:
Use multicurrency cards or wallets:
Some UAE fintech platforms offer prepaid travel cards where you can lock in exchange rates and avoid foreign fees. These are handy for frequent travellers or expats who split time between countries.
Choose the right bank card:
Some premium credit cards in the UAE waive international transaction fees, but you'll need to check eligibility, as they often require a higher income or annual fee.
Avoid paying in AED abroad:
At stores or ATMs overseas, always choose to pay in the local currency. Opting for AED might seem easier but usually costs more due to poor exchange rates and hidden charges (known as
Dynamic Currency Conversion
or DCC).
Reduce card-based remittances:
If you're using cards for cross-border payments, look into direct bank transfers or licensed exchange houses with lower overall fees.
What's Coming Next?
There's talk of a UAE-based payment alternative, Jaywan, going global later this year. It's designed to offer smoother and possibly cheaper international transactions.
But for now, it's still in early stages and doesn't solve the immediate cost hike facing expats in 2025.
FAQs
1. Will this impact online purchases from abroad?
Yes. Any time your card is charged in a non-dirham currency, including international websites, the 3.14% fee will apply.
2. Are debit cards affected too?
Yes. Both debit and credit cards from most UAE banks will carry this new fee structure.
3. What if I use a UAE exchange house or transfer app?
It depends. If the app charges your card in a foreign currency, you'll still pay the fee. Direct bank transfers are usually a safer bet.