Erscheinung:16.07.2021 | Topic Consumer protection Credit cards with financing options: No-fee offers can become expensive
Credit cards that can be used to finance purchases can become expensive, even if providers advertise them as being “no fee”. Before consumers decide to take out a credit card, they should therefore carefully compare the different offers. BaFin, advising consumers to do so, provides a number of tips on this topic on its website.
This is due to the fact that for some time now, there have been credit cards on offer in Germany that enable consumers to pay for purchases but also to finance their payments – regardless of whether enough money happens to be on the account. This type of credit card is known as a “real” or “revolving” credit card or a “credit card with a minimum payment”.
These offers are convenient: outstanding transaction amounts can be debited from the current account over several months without the customer personally having to make arrangements to finance the transactions. This convenience can come at a high price, however: interest of up to 20% p.a. is charged for this sort of financing. BaFin is following the developments in this market segment and will take action, if required, based on its mandate to protect consumers’ collective interests.
In the past, customers in Germany were generally accustomed to having their credit or debit card payment transactions debited from their current account directly or once a month. If the account balance was not sufficient, the deficit had to be paid out of the arranged overdraft or via a consumer loan.
