SECTION 1
Emergency Savings provides you the feeling of security that you are well provided when an unexpected event happens.
It allows you to focus on the issue at hand instead of worrying about money.
It keeps you from borrowing money on higher interest rates, thus helping you to manage your cashflows effectively.
In UAE; credit cards providers charge an interest of 3.00% to 3.50% in addition to the annual fees and other fees, which is about 36% to 42% interest per annum,
In other words if you borrowed AED 10,000 to pay for the tickets to your home country in the event of an emergency and if you pay AED 1,000 every month, you would have paid a total of AED 12,067.55 including an interest of AED 2,067.55.
If you had an emergency savings funds you could have saved the AED 2,067, which you paid as interest to the credit card provider.
Click the following link to access the credit card payment calculator to identity how long it will take to pay off your card or to find out how much you will pay as interest in your card balance.