Navigating the credit card landscape in the Netherlands as an expat

Relocating to a new country often comes with a slew of challenges, and for expats moving to the Netherlands, setting up financial systems can be one of the most daunting. Among the various tasks of settling in, securing a credit card is an essential one. However, credit card policies and systems vary across countries, and expats from nations like the UK or the US may find the process different from what they’re used to. This guide provides an overview of what expats need to know about finding and obtaining a credit card in the Netherlands.

Understanding the Dutch credit card system

One of the first things expats should understand is that the Netherlands has a distinct approach to credit cards compared to some other countries. In contrast to countries like the UK or the US, where credit cards are commonly used for everyday purchases, many Dutch residents prefer using debit cards or direct bank transfers for payments. This reliance on debit cards, or “pinpassen,” means that credit cards are not as ubiquitous, and their use is often more reserved for online purchases, travel, or emergencies.

Credit cards in the Netherlands function similarly to those in other countries: you receive a line of credit with an assigned limit, and any borrowed funds must be repaid at the end of the billing cycle. The key difference is the degree to which Dutch banks and financial institutions scrutinise applicants, particularly expats. Given the risk-averse nature of Dutch banks, they may be more conservative in issuing credit to those without a long history in the country.

Types of credit cards available in the Netherlands

Expats can choose from two main types of credit cards when searching for one in the Netherlands:

1. Credit cards issued by Dutch banks: These are the more traditional credit cards offered by local banks such as ABN AMRO, ING, and Rabobank. These institutions will often require you to hold a Dutch bank account before issuing a credit card. Expats may find it helpful to open an account with a bank that has English-language services, especially if their Dutch is still developing.
2. International credit cards: Many expats may already hold international credit cards from their home countries. These cards, such as Visa, Mastercard, or American Express, are accepted at many establishments in the Netherlands. However, using these can incur foreign transaction fees, and payments may be subject to exchange rate fluctuations. Some expats find it beneficial to maintain an international card while applying for a local one to avoid excessive fees.

The application process: what expats need to know

Securing a Dutch credit card as an expat can be a slightly more complicated process than applying for one in your home country. Here’s what you need to be aware of when going through the process:

1. Residency and legal status: To apply for a credit card in the Netherlands, you must have legal residency. This means that before even considering a credit card, you should ensure that you have registered with your local municipality and obtained a BSN (Burgerservicenummer), the Dutch citizen service number. The BSN is essential for almost any formal interaction in the Netherlands, from opening a bank account to paying taxes.
2. Dutch bank account: Most banks will only issue credit cards to individuals who hold a Dutch bank account. Therefore, opening a bank account is often the first step towards securing a credit card. Popular banks such as ABN AMRO and ING offer English-language services, making them suitable choices for expats.
3. Credit history: Unlike in the UK or the US, where credit scores are widely used, the Netherlands has a different approach. Dutch banks assess creditworthiness primarily through the Bureau Krediet Registratie (BKR), which keeps records of credit agreements and debt. As an expat, you likely won’t have a Dutch credit history, which can make it more difficult to obtain a card. Some banks may compensate for this by considering your income level, job stability, and residency status.
4. Income and employment status: Proof of stable income is a crucial factor in your credit card application. Expats with full-time employment contracts and higher incomes will generally find it easier to get approval. Freelancers or individuals on temporary contracts may face more scrutiny or be offered cards with lower credit limits.
5. Length of stay in the Netherlands: Banks may also factor in the length of time you’ve been residing in the country. Expats who have been in the Netherlands for a longer period are often seen as lower-risk applicants compared to newcomers. For new arrivals, securing a credit card may require additional documentation, such as proof of residence and a longer waiting period.

Choosing the right credit card

When selecting a credit card in the Netherlands, it’s essential to consider factors such as fees, benefits, and interest rates. While many Dutch credit cards come with an annual fee, they also offer advantages such as travel insurance or cashback programmes. Here are some factors to keep in mind:

• Annual fees: Many Dutch credit cards come with an annual fee, which can range from €15 to €60. Some premium cards may charge even higher fees but offer additional benefits like travel insurance or access to airport lounges.
• Interest rates: Interest rates on credit cards in the Netherlands tend to be relatively high, often around 14% to 15%. Expats should consider whether they can pay off their balance in full each month to avoid accruing interest charges.
• Benefits: Some credit cards in the Netherlands offer perks like cashback on purchases, discounts on travel, or insurance coverage for things like rental cars and medical emergencies while travelling. If you frequently travel within Europe or abroad, choosing a card with strong travel benefits may be worthwhile.

Alternatives to credit cards

Given the challenges some expats face in securing a credit card, it’s worth exploring alternatives, especially for daily purchases:

• Debit cards: As mentioned earlier, Dutch residents rely heavily on debit cards for everyday transactions. The system, known as iDEAL, is widely accepted across the country, from supermarkets to online retailers. Expats may find that a debit card linked to a Dutch bank account suffices for most purchases.
• Prepaid cards: For those who don’t qualify for a traditional credit card, prepaid cards can be an option. These work similarly to credit cards but require you to load funds in advance. Prepaid cards are useful for online purchases or when travelling outside of the Netherlands, though they may not offer the same level of benefits as traditional credit cards.
• International cards without fees: If you don’t plan to apply for a Dutch credit card, it’s worth considering international cards that waive foreign transaction fees. Some providers offer cards specifically designed for travellers and expats, which can help you avoid the hefty fees associated with using a card from your home country.