Credit card universal payment method

The credit card, a lucrative form of consumer credit, is in the wallets of millions of citizens. Paying with credit cards has become so common that people do not realize they are taking out a loan.

Pay by credit card

The credit card has been known since the late 19th century. In some industries, cards were issued to select companies and customers that could only be used in the stores of those issuing institutions. Since the 1950s, credit cards have developed into a universal payment method that has become an integral part of today’s payment transactions. Different variants of the card are distinguished.

The charge card

The charge card gives the cardholder the opportunity to carry out payment transactions with the card up to an agreed credit limit. The income is collected and (usually) settled with the cardholder monthly. The cardholder has an interest-free loan with a short term from the moment of purchase until the moment of settlement. The monthly spending limit can unintentionally be blocked due to handy sales tricks from some internet shops that offer the option to pay in installments with the credit card.

The classic credit card

The credit card as a classic credit card provides its holder with effective credit. Here too, expenses are collected within the limits of an individual disposition space, but the cardholder now decides whether the refund is made in one amount or in installments. If he decides to pay in installments, he will of course be charged interest , as is usual with any loan .

The debit card

The debit card is the most common credit card variant in the Netherlands. The transactions are not collected, but debited from the cardholder’s account shortly after the purchase. Transactions made with this card are therefore paid immediately and there is no suspension of payments via deferred billing. This variant in the form of a Europas or debit card can be found in almost every wallet.

Prepaid credit card

The last card variant is the prepaid credit card, which best translates as a credit-based card. In order to carry out transactions with prepaid credit cards, a credit must first be deposited on them. Such deposits can be made via bank transfer or cash deposit. In addition to worldwide acceptance, some credit cards offer a number of useful extras such as:

  • free insurance for your purchases against loss, theft or damage
  • luggage or flight delay insurance when traveling
  • renting a car abroad without paying a deposit

If you do not qualify for a normal credit card (for example due to poor BKR registration ), you can still benefit from all these extras via a prepaid credit card.

Costs for retailers and cardholders

The usage costs of credit cards are mainly borne by the retailers where the turnover is generated. On the one hand, a certain percentage of the turnover, usually 3%, is paid to the credit card company, and on the other hand, the entrepreneur pays fixed costs for using the system. The customer (= cardholder) pays an annual fee in the form of a card contribution to the card issuer.

Apply for a credit card

Nowadays you can apply for a credit card online at almost all major banks . The actual application does not take much time. The actual work has to be done in advance: selecting the right and best credit card! But how do you find out? Credit cards are mainly issued by four major international credit card companies, namely:

  • American Express;
  • Dinners Club;
  • MasterCard;
  • Visa.

While American Express and Diners Club largely issue their cards themselves, Visa and Mastercard issue their cards through affiliated partners. Regardless of who issues the card, one must remember that issuing a credit card also requires one to be sufficiently creditworthy!