A lot of people have been losing their employment and facing significant financial constraints, which has led to their inability to pay their credit card bills. There is a common misconception that failure to pay with credit card dues directly leads to criminal liability.

The relationship between a bank and a credit card holder is fundamentally contractual in nature. When a customer applies for and uses a credit card facility, they agree to repay the amounts utilised together with any applicable interest, fees, and charges in accordance with the terms of the card agreement.

Article 221 of Federal Decree-Law No. (25) of 2025 Promulgating the Civil Transactions Law states that contracts must be performed in good faith, meaning that both parties must carry out their obligations honestly and fairly. Neither party should exploit the other or act in a way that defeats the purpose of the agreement. Accordingly, a cardholder’s obligation to repay outstanding credit card balances arises from a contractual commitment rather than a criminal prohibition. A failure to repay credit card dues attracts remedies under the Civil Transactions Law.

Relevant Legal Basis – Federal Decree-Law No. (25) of 2025 Promulgating the Civil Transactions Law

  1. Article 341 of the Federal Law states that all of the debtor’s assets constitute security for the performance of their debts. It also states that creditors are generally equal in their entitlement to recover from the debtor’s assets unless a creditor enjoys a legal priority granted by law.
  2. Article 342 introduces the concept of an indirect action, which allows a creditor, under certain circumstances, to exercise rights belonging to the debtor where the debtor has failed to do so and such failure may lead to or worsen insolvency.

The law prioritises the preservation of assets and ensures that obligations are satisfied. The primary focus is on repayment and enforcement rather than the criminalisation of financial hardship.

Criminal Liability Usually Arises from Conduct, Not from Debt Itself

The main concern here is determining when criminal liability may arise. Criminal exposure generally arises from unlawful conduct surrounding a financial transaction, rather than from the debt itself. However, legal exposure may increase where allegations involve dishonest or unlawful conduct connected to obtaining, using, or avoiding repayment of the debt. The situations in which criminal liability may be attracted include:

  1. Obtaining Credit Facilities Through False Information or Intentional Misrepresentation– If a person obtains a credit card or any other financial benefit through fraudulent methods, deception, false identity, or false capacity, criminal liability may arise under Article 451, which addresses fraud under Federal Decree-Law No. (31) of 2021 Promulgating the Crimes and Penalties Law.
  2. Submitting Forged Employment, Salary, Identity, or Financial Documents – If a person applying for a credit card submits altered or fabricated documents to obtain credit facilities, banking approvals, loans, or other financial benefits, such conduct may constitute offences under Articles 251 and 252 relating to forgery of documents under the Crimes and Penalties Law.
  3. Misuse of Cheques or Banking Instruments – There have been significant cheque-related reforms in recent years. However, there remain circumstances in which cheque-related conduct can lead to imprisonment or result in criminal liability under Articles 673 to 676 of the relevant legislation. Cheque-related criminal liability may still arise in cases involving cheque forgery, fraudulent use of cheques, unlawful stop-payment instructions, issuance of cheques from closed accounts, deliberate acts preventing payment, or other forms of deception and misuse of banking instruments.

Conclusion

While unpaid credit card debt is generally treated as a civil matter under UAE law, it is important to understand that criminal liability may arise where there is fraud, forgery, deception, or other unlawful conduct associated with the financial transaction. The law seeks to balance the rights of creditors with the protection of individuals facing genuine financial hardship. Understanding the distinction between civil liability and criminal conduct is essential for anyone dealing with banking or debt-related issues.

We at Ayesha Aldhaheri Advocates & Legal Consultants, we assist clients in matters relating to credit card debt, banking disputes, debt recovery proceedings, enforcement actions, and travel ban concerns. Our team advises individuals facing credit card repayment difficulties and works to protect clients against unfair banking practices, unlawful recovery measures, and disputes arising from financial obligations.