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Credit cards

There are about six million credit cards in circulation in the Netherlands. They are mainly used online, for more expensive purchases at the counter and during holidays abroad. At the Dutch counter, use is limited: less than 0.5% of purchases are paid by credit card.

Differences from debit card

A credit card has some features that distinguish it from the regular debit or payment card:

  • Payments are settled with the cardholder in arrears, usually once a month.
  • An amount may be reserved in advance(pre-authorisation), for example for hotel reservations or for the deposit for car rental.
  • With many credit cards, purchases are insured for a few months against damage, loss and theft.

You can use credit cards to pay online, for instance in online shops and for online streaming services. This is now also possible with all the updated debit cards that more and more Dutch people get from their banks. The main difference remains that credit card payments are collected one per month in arrears and that every debit card payment is debited directly from the linked payment account. On the outside, the distinction can still be seen by the word credit and sometimes a different notch on the card.

Limited acceptance at the counter

Like a debit card, a credit card can be used to make contactless payments at the counter. Because the transaction fees for credit cards are higher than the lowest rates for debit card payments, about 40% of Dutch retailers choose not to accept credit cards.

Due to card brands’ HACR guidelines, there has been an increase in full acceptance among retailers. Retailers can still opt for limited acceptance of non-European credit cards only, in addition to all debit cards.

Consumer Credit Directive (CCD2)

The European Consumer Credit Directive (CCD2) aims to protect consumers from excessive loan debt. This regulation focuses in particular on Buy Now, Pay Later payment services (such as from Klarna and Billink) and includes stricter creditworthiness tests.

The question is whether credit cards will also be covered by the new rules. Member states have the option to exempt so-called deferred debit cards from CCD2 rules. In the Netherlands, almost all credit cards fall into this category because:

  • all credit card payments must be repaid in full each month; carrying forward to the next month is not possible;
  • no interest costs are charged on credit card payments.

If the Netherlands does not grant exemptions, the cost of credit cards will rise, which could lead to a narrowing of supply.

Payments Association Netherlands and the Dutch Banking Association (NVB) have pleaded with the Ministry of Finance for exemptions. It is not yet clear whether this request will be honoured.

Outlook

The use of credit cards at Dutch counters is very limited and is not expected to increase. Stricter regulations may make credit cards more expensive and less attractive to consumers. In addition, the updated debit card offers many of the same features, making a credit card less often necessary.

Credit cards will, however, remain a necessity at many vehicle, vessel and holiday home rentals.