A credit card
A credit card is a payment card with which it is possible to make deferred payments. Your payments and cash withdrawals are not immediately deducted from your account, unlike a regular debit card. The credit card issuer actually lends you money or credit. You will have to repay the borrowed amount at a later date. The amount due is debited from your current account by means of a standing order or a direct debit.
The advantages of a credit card
- Enjoy your purchase now, pay for it later.
- You can spread your payments with a credit card.
- You can pay securely with a credit card, both online and in physical stores.
- You can pay or withdraw money worldwide.
- You will enjoy other benefits depending on the credit card you choose, for example:
- Financial protection for your purchases
- Travel insurance
- Loyalty Benefits
The different types of credit cards
In our country, anyone wishing to obtain a store credit card can choose between three types of credit cards, related to the operation of credit repayment:
Credit card with deferred payment
With this card you can make deferred payments. The money you have spent is automatically withdrawn from your current account the month following your purchases, on a fixed day of the month, by direct debit or standing order. As long as you properly repay the amount every month, you don't have to pay any interest.
Credit card with line of credit
This card also allows deferred payments, but here you can spread the repayment over several months. However, you must repay a minimum amount each month. For lines of credit up to €5,000, you must repay 1/18th of the reserves used each month. For credit lines over €5,000, you must repay 1/20th of the reserves used. You repay the rest of the amount due in installments, but you pay (high) interest on this amount. These depend on the (annual) interest rate that the bank applies to the credit card.
Prepaid credit card
A prepaid credit card is a card on which you must deposit money in advance in order to use it. So you can't make deferred payments, but you don't have to pay interest either. You cannot spend more than what is written on the card, which makes this type of credit card particularly attractive for young people or students.