Taste for the good life leads to 13 maxed out credit cards and spiralling debt
Racking up purchases, dining in expensive restaurants, maxing out 13 credit cards and living way beyond his means landed Albert Sabado in debt and in trouble with the law, which he is still trying to overcome 12 years later.
The Filipino printing press supervisor’s debt spiralled to Dh50,000 with six banks in four years after he first signed on for a card in 2005.
He finally paid back Dh27,000 to the last bank in 2015 after borrowing the money, without interest, from friends.
Now a sales officer, Mr Sabado still owes Dh8,000 to the friends who helped him to clear major bank debts.
“The loans I took were not for a house or any project in Manila – it was only for pleasure here. Eating in good hotels, buying stereos, cameras, video cameras, electronics, because I love gadgets. It looked like I’m a big man or something. I didn’t have a plan. I just experienced how to become rich with the credit cards,” Mr Sabado said.
He sent home most of his monthly Dh5,000 wages and used about the same amount he earned in overtime to pay credit card fees.
He did not realise the interest was building up when he did not clear the full amount.
“That time it was very easy to get 13 cards because with each bank you get two cards at least. I just signed a form and got a credit limit, it was simple,” the 52-year-old said.
His fantasy world began unravelling with the global recession in 2008, during which thousands of workers across the Arabian Gulf lost their jobs. “Our overtime was much less and sometimes there was no salary for two or three months. Then people started calling, threatening me that I would go to jail if I did not pay back the cards.
“But what was the use of threatening me because I was not getting my salary. When I got some money, I paid for the cards, but the fees kept coming and I could not pay.”
Then a bank filed a police case against him when Mr Sabado could no longer make payments and his employer filed an absconding case when he accepted another job offering higher wages.
Although the absconding case was later withdrawn, he had hit rock bottom. With three children in the Philippines, he needed to keep sending money home because his family depended on him.
Unable to go home for two years after 2006 because of the legal case, he initially did not let his wife know about the trouble he was in.
The Abu Dhabi resident reached his lowest point when he could afford to eat only bread after paying Dh1,200 for rent, water and electricity in a shared apartment.
“The money in my pocket was Dh50 for a whole month. I could eat one paratha (flatbread) a day. I had to pay my house bills in Philippines because I cannot stop sending money home. I didn’t want my family to suffer also. My friends would say, ‘Come, we will all go to the mall to eat’. But I’m ashamed. I have Dh30-50. How will I go and eat?” he said.
Attending workshops with Pinoy Wise, an organisation that advises Philippine nationals to manage their finances, was a life saver and the lifeline he used to extricate himself from debt.
He also came clean to his wife and worked part-time jobs until 2am.
“My wife got very upset. She cried and said she told me not to take credit cards because it would be a big problem for us. She blamed me a lot and I tried to make her understand that I would change. I had to tell my wife the truth – that is why we are together for 23 years.”
After faithfully attending seminars, he stopped using credit cards, learnt tips on how to save and talk to banks.
“I realised there was no other approach but to freeze all my credit cards and pay the big amounts first. I kept the cards in my room. I would save money and ask the bank what amount I could pay to close all my problems. I took money from my friends without interest to pay back the cards. Then khalas, it is almost over.”
With the bulk of his debt paid, he is resolutely making pension fund payments and saving for an apartment in Manila.
He has one credit card, which he rarely uses, linked to his salary account. When recently told the credit limit would be increased, he promptly declined, asking the bank to cap the limit.
Teaching Filipinos like Mr Sabado to chalk out their objectives is the aim of Edgar Bacason, partner at a lifestyle company and co-ordinator of the Pinoy Wise Movement, which was launched in 2012 to provide support to Filipinos working overseas.
“Filipinos went overseas with the purest of intentions, to provide for their families, but they ended up going back to the Philippines without any savings. They have problems with the police and the banks for buying things they did not need.
“We took them back to the basics. We made them realise that we are migrants and there are two sides of migration – going home happy with more money or, on the negative side, some families break up because they do not have common goals.”
Ensuring his countrymen understand the true meaning of savings is vital.
“We made them understand that they can spend only what is left after they save. We teach them to differentiate between needs and wants so they are able to control their expenses. And we talk about entrepreneurship to plant a seed and arouse their interest in investments and in business,” Mr Bacason said.
Expatriates are also advised by Barney Almazar, the director of legal practice Gulf Law who is also head of legal aid at the Philippine embassy and consulate.
“We help them come to a settlement with the bank because at the end of the day the banks want to get paid. They would rather get monthly settlements than put you in jail and get nothing.”
Mr Almazar said the problem stemmed from abuse of credit.
“To me, it is not a problem about having a credit card. It is the abuse that is causing the problem. It is a false sense of entitlement. This is not money they have earned but they are already using it up,” said Mr Almazar.
“When they are new here, they want to buy and experience everything. They see offers and sales and get into trouble. But they want their family to think they have made it big in the UAE. But their family does not know they are sleeping at a friend’s place and do not even have money to buy food.
“I tell them it is a matter of communicating what they really earn. I ask them, ‘Is it your goal to just have a Facebook status with an LV bag, or do you want a house back in Manila?’”
Mr Sabado has learnt the hard way. He now acts as a conscience for others, reminding them of their goals when they first came here.
“I see other Filipinos crying at immigration because of cases against them. I tell my countrymen that you come abroad to work and not for pleasure. “I will retire in four years, when I’m 56. I’m still strong. As long as you are alive, there should be a goal. I do not stop dreaming.”
The loans I took were not for a house or any project in Manila – it was only for pleasure here