The creditcard; a virtue for one and a burden for the other. Now that we are buying more and more online, you often can’t avoid a credit card. I have to admit: it is also incredibly useful. Because with my credit card I can pay effortlessly anywhere in the world.
But that also makes me think. Because isn’t it too easy? I checked with some friends. What turned out to be? Most everyone has a credit card, but nobody knew how much such a credit costs. High time for a blog about the credit card.
60% of Dutch people have a credit card
Research by ICS, market leader in issuing credit cards including Visa and MasterCard, in 2014 showed that 60% of Dutch people have a credit card. Not surprising, because it is an easy payment method.
You can buy something now, without having to pay for it right away. So even if you don’t have any money on your account, you can simply pay your bills or just go shopping. But the sun rises for nothing and credit cards are therefore not free.
Credit card annual fees
Sometimes you get a free credit card with your checking account. The costs for the credit card are then included in the package price. In other cases you have to pay annually for your credit card. These annual costs vary from a few to a few hundred euros. I really don’t find this so shocking. What matters to me is the interest that is calculated.
Credit card interest varies from 12% – 14%
It is true that you do not always pay interest for a credit card. With a credit card you often have a 20 to 30 day deferment of payment. This means that you can pay with your credit card and have 20 to 30 days to repay the amount. As long as you do this, nothing is wrong. But are you late? Then you must pay interest. And that goes up considerably. For example, you pay interest between 12.4% and 14% at the four largest Dutch banks. Sin of your money.
Alternative credit card
Do you also have a month left at the end of your money? But are you shocked by the high credit card rates? Then you can think about a Continuous Credit. With a standing credit you also get access to extra money, without having to withdraw everything at once. But at a much lower interest rate.
Prevent credit card debt
But of course it is smartest to prevent debts. That is why I close with a few tips to reduce or completely avoid your credit card debt:
- Use savings or, for example, holiday pay to pay off your credit card debt faster. This means you are debt-free faster and you pay less interest.
- Do you pay your credit card in installments? Then try to increase the installment amount slightly and repay it faster.
- Lower your credit card limit.
- Never take more than one credit card.
- Do not always take your credit card with you. That way you will not be tempted.
- Do you have to make a big expense in an unexpected way? Then consider taking out a loan. Thanks to the low interest rate, the loan is a lot cheaper.