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Weapons for financial independence #2: Credit Card

This is a continuation in the series of tools that I choose to help me get to financial independence (which for me, is a combination of primarily earning more, and spending within limits). The previous post analysed my choice of bank in the Netherlands, and can be found here.

As anyone in the Netherlands may know, Dutch banks have a habit of giving Maestro or V-Pay cards ("pinpassen") to their clients. I can understand the advantage they offer to merchants, since the merchant fee for these cards is much much lower than traditional MasterCards or Visa cards. So, Maestro and V-Pay offer a robust solution to bringing digital payments at lower costs to an economy.

Why do I need a credit card?

This is a good question, since Maestro and V-Pay are accepted in many countries world wide. They work perfectly well for usual Point-of-sale payments, or for ATM withdrawals and many of these cards also support contactless payments. One can argue that their universal acceptance makes them ideal candidates to the "only card we need".

That may be the case for many people, but for me I wanted to find a payment method that can help me with the following:
  • Easy usability for online transactions:
    • Maestro and V-Pay cards are notoriously hard to use online. It is ridiculously hard to determine the card number to be entered on the online shop since this is not visible on the card. Secondly, many online merchants do not accept a Maestro or V-Pay card.
  • Lower fees for non-Euro transactions (both online and offline):
    • I tend to travel a lot - both within and outside the Eurozone. It always hurts me to pay the impossibly expensive Foreign transaction fees when I use my pinpassen for non-Euro currencies.
Credit cards also tend to offer great fraud protection when shopping online

Card Choices for Dutch residents

The Netherlands (and in my opinion many nearby European countries) don't seem partcularly fond of buying items on credit. The demand and thereby the options of credit cards available to residents here is very restricted, with many companies offering "prepaid MasterCards" or "debit cards" offered by Visa/MasterdCard. This is a lost opportunity for citizens here, since many times Credit cards offer lucrative incentives, that can make their use very rewarding.

From my research so far, I've found the following options available. In the rest of the post, I lay my reasoning behind my choice of cards.

  • Credit cards offered by banks or ICS
  • Cards with Rewards
    • American Express
    • American Express Flying Blue (KLM) cards
    • Quander's Miles &More (Lufthansa) credit cards
  • Prepaid Cards
    • Revolut
    • Transferwise
  • Debit MasterCard/Visa (including Bunq Travel Card)
  • All-in-one cards (Curve)
In the comparison below, I compare the free tier offered by Revolut.

BankFeesRewardsApp featuresFX FeesPoints
Bunq (as primary bank)10010107.5
Bunq card only1001087
Revolut1001097.25
Other Banks90524
American Express510456
Quander69255.5

A quick reasoning behind the scores above:
  • If banking with Bunq, the cards are included in the same fees
  • Getting a Bunq Travel card without the account gets the same FX fees benefits, but charges users for withdrawals in non Euro currencies
Since I bank with Bunq already, it's easier and "more cohesive an experience" if I use their cards when traveling abroad. Not only does it get me no fees on foreign currencies, I can also withdraw outside Europe free of charge and have a great app experience that tracks all my spendings in 1 platform.
I do use Curve as a card-of-cards, to get the 1% cashback on stores that I frequent a lot.

TLDR;

While I understand the value of incentives many credit cards offer, it's hard for me to subscribe to services like American Express or Quander's Miles&More credit cards. The rewards from my yearly spends would not be enough to cover the fees that these premium cards ask for.
  • As mentioned in my previous article I use Bunq as my bank, which allows me to get the Bunq Travel Card (a credit card that doesn't exceed my linked bank's balance - allowing me to avoid debt). Additionally, all Bunq cards have 0 Foreign exchange fee, and allow free ATM withdrawals - a feature that appeals more to me than rewards.
    • For readers who do not bank with Bunq, I can highly recommend using a prepaid card alternative like Revolut. Revolut offers no Foreign Exchange fees and also allows free ATM withdrawals up to €200/month.
  • I also recommend using Curve -  a service that allows making payments through multiple cards, all through one Curve card. Payments made on the Curve card can be attributed to any of the linked cards, making it the only card one needs to carry.
    • Curve also offers a 1% cash-back on 3-6 merchants that user's choose. This can make for an attractive incentive scheme. 

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