First Gulf Bank Ltd. recently launched a new discount-fee credit card rate plan for United Arab Emirates residents designed to expand bank-account relationships by moving cardholders’ savings from using the card into a separate bank account.

The Abu Dhabi-based bank on March 13 said it is marketing a new credit card rate plan for Emirati residents that carries new, lower interest rates of 1% to 1.5% on revolving balances and reduced fees for late payments and exceeding credit limits.

The rate is available only to local citizens, not to expats or other immigrants that make up a large portion of the UAE’s population.

The bank’s credit cards typically carry a monthly interest rate of 3%, a cash-advance fee of 3%, an annual fee of 500 dirham (US$136 or 103 euros), and overlimit and late charges of about 150 dirham each.

“The new service is applicable for all Emiratis applying to any of the bank’s credit cards,” a spokesperson for the bank tells PaymentsSource.

Customers who agree to direct depositing their paychecks to a First Gulf Bank account would pay 1% interest on card balances, and others would pay 1.5%, he says.

“We are also offering 50% discounts on all fees and charges pertaining to card usage,” he says. “Emiratis would also be receiving the card free of charge and without any renewal fees.”

the savings each customer realizes from the new cards’ lower interest rates and fees will automatically accumulate in a separate savings account with First Gulf, the bank says.

Cardholders may collect up to 10,000 dirham annually by participating in the program. “The program is meant to encourage UAE nationals to save,” the spokesperson adds.

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