Cheap credit cards:
As easy as it can be, credit cards are never cheap. You often pay the top prize for the plastic money and this convenience.
First of all, let's distinguish between a loyalty card and a credit card. Many consumers confuse this, because with a customer card you can often buy goods on credit. However, these loyalty cards are not issued directly by a bank. A credit card is, these are issued by banks and credit card organizations such as American Express, VISA or Mastercard.
Although credit cards were already invented in 1950, cheap credit cards are still to come.
The costs of a credit card are considerable and start with the annual costs. They start from a few tens to more than 100 USD per year. They are also happy to offer you an extra credit card, ideal for your partner, but you will also have to pay annual costs for this.
The convenience of your credit card is the big danger, before you know it you have reached your limit. Perhaps more than you wanted or could spend that month. The issuer of your credit card will charge you a hefty interest, even if you can pay your expenses immediately the month after.
It becomes even more expensive if you have to repay the expenses of that particular month in installments. Even though the maximum is at 16% interest, this is still many times more than with a revolving credit or personal loan.
For example, Across Lender's credit card made the news in 2007. The supermarket that is classified as cheap issued a credit card. Easy way of customer loyalty and to earn something extra. Something extra? The interest charged by Across Lender on credit card payments was between 15% and 17%!
Of course, credit cards also have advantages, sometimes the first year is free or free credit cards for your partner and with some credit card companies all purchases are insured as standard. However an insurance for which you pay 16% interest is a very expensive insurance!
You want a credit card, right?
Fine but take the following tips with you so that you do not pay too much and can enjoy all the conveniences that a credit card offers:
Where can you pay with your credit card?
Take a good look at exactly where you can pay with your credit card. Using your credit card abroad? Some Dutch credit cards can only be used in the Netherlands. The most accepted credit card is VISA's credit card.
What extra services do you really need?
A credit card with free access to the lounge at the airport, unnecessary luxury or badly needed on your business trip? Your luggage insured up to 10,000 USD while you only take the essentials with you? A helpline that is available 24 hours a day while you are already well insured?
The credit card companies would like to spoil you and make the card exclusive. Interesting, but you pay a lot for this. Take a good look at what you need, an extra payment method for unforeseen situations or a pass that gives you a lot of privileges that you will use sporadically or never?
What does the credit card cost?
View the annual costs of your credit card. They may offer you a free credit card for the 1st year and then pay the top prize. In addition, you must compare credit cards based on the interest you will pay for each payment.
Use your credit card only where necessary!
Do they also accept your regular debit card? Then leave your credit card in your wallet and think about what you will save because you do not borrow the money temporarily but pay directly from your current account.