Do you have a credit card? As online shopping becomes more and more popular, it seems that we can no longer avoid it. Also for travelers, it is very useful to have a credit card in your pocket. Just to book a hotel, but also so you can effortlessly pay everywhere. At the same time, it begs the question: isn’t a credit card really too easy to use? Do you know how much interest you pay on your credit?
60% of Belgians use a credit card
A credit card offers you more advantages than a simple payment abroad. You don’t have to pay for your purchases directly. This allows you to make purchases or pay your bills, even if you don’t have money in your current account. As you would expect, research has shown that in 2014, 60% of the Belgian population had a credit card. But a credit card also costs money. You often pay a fixed amount per year for its use. In addition, you pay interest on the credit used.
Watch out for high rates!
It is this interest that makes using a credit card a lot of paperwork. Of course, you don’t always pay interest on your credit. You often have a few days to a month past due. If you repay the credit used on time, there is no problem. However, if you are late in repayment, you will have to pay interest. A great interest often. In the big Belgian banks, for example, you pay between 12% and 14% of interest for your credit.
Low interest revolving credit
It is good to understand that you are shocked by this high interest rate. A waste of your money, of course! Are you looking for an alternative? You can then consider revolving credit. In the case of revolving credit, you agree with your lender on a maximum amount to be drawn. Up to this amount, you can withdraw and refund money from your credit at no cost. Of course, you also pay interest on the amount withdrawn. But with an interest rate of 4.5% or more, you save a lot of money compared to a credit card.