What is the cost of a credit card and do the benefits outweigh the cost?


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When choosing a credit card, you should always keep an eye on the costs. Because these do not only consist of the annual fee. The real cost of a credit card can sometimes outweigh the benefits.

The true cost of a credit card is relative. Depending on the circumstances, a credit card with an annual fee can be worthwhile because it usually offers some additional services. High interest rates can cost a lot of money on credit cards – especially if you only pay off the outstanding amount in partial payments.

Germans have been over the years become more receptive to credit cards. That is why the true cost of a credit card is always the first thing everyone check before getting a credit card. 

Even trends like mobile payment are not possible without a credit card. Often their costs are calculated in the form of an annual fee. But there are also cards that do without it and are free of charge. Here it is important to pay attention to other fees and to check additional services. For example, free credit cards are often linked to the opening of a checking account.

ost of a credit card

What are the general credit card costs?

There are different things to consider when choosing your credit card. This not only includes the card operator and the card type (see credit card comparison). An important aspect are the annual fees and the question of what other costs are associated with using your credit card. 

1. Annual fee

The majority of direct banks such as ING or DKB do not charge an annual fee for either the main or partner card. This is often different with regional banks and savings banks, but also with supra-regional institutions (Hypovereinsbank, Postbank, Commerzbank, etc.). In the best case scenario, these financial institutions charge around twelve euros per year and card – but costs up to 45 euros can also be included.

2. Cash supply

Are there any fees for this in Germany, the euro area or outside the euro area? This is very important for people who travel a lot.

3. Foreign currency fee

If you pay with the card in Germany and the Eurozone, there are no fees. That is different outside of the euro area. There are sometimes drastic costs here.

4. Interest

If you do not have the monthly payment debited in one fell swoop, but instead pay in installments, some credit card issuers charge, in some cases, drastically high interest rates of 20 percent and more.

5. Second card

Some providers also charge fees for a second card or if the first one is lost.

TIP: the partner often benefits from the same additional services as the primary cardholder. But sometimes these are also limited. Therefore, check whether, for example, rental car or travel insurance also applies to the second card.

6. Own contribution in case of abuse

If your credit card is misused, you may have to pay your own contribution. Find out more here. Because credit card fraud can occur especially abroad. In this regard, you should know your protection and what you may have to pay for it.

TIP: In the event of abuse, you should block your credit card immediately. If you also use your credit card for mobile payment via your smartphone, it is advisable to put the lost device into so-called “lost mode” if your cell phone is lost or stolen. After that, no more payments can be made.

7. Account statements

Some providers pay dearly for the creation of bank statements. 

8. Transfers

Also, check whether there are any fees for possible transfers. In this case, you should use payment systems such as Paypal, Giropay or Paydirect and refrain from transferring via your credit card account.

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Benefits of many cards are worth cash!

Those who are already adequately insured should choose a free credit card, especially if the card guarantees free cash supply worldwide.

A credit card with travel insurance including travel cancellation, travel accident policy and other insurances can only be found for cards for which an annual fee has to be paid.

2 of the most reommended credit cards with travel insurance are:

  • GoldCard from the Hanseatic Bank – Consumers get a credit card with travel insurance and an all-round carefree package for travel protection. This includes travel cancellation and interruption insurance as well as flight, luggage and international health insurance. Even the smartphone is protected against damage and theft.
  • 1Plus Visa Card from Santander Bank – This credit card with travel insurance comes permanently without a monthly basic fee. It also gives customers a fuel discount of one percent up to a maximum turnover of 200 euros per month. In addition, no fee is charged per card account for four cash withdrawals per billing month.

Comprehensive travel protection and discounts

These are often included with an annual fee credit card and consumers can sometimes even save money as a result. The following applies here: Anyone who records high sales with the credit card and uses them frequently can generally benefit from paid credit cards. For example with the Amex Gold Card or the Miles & More mastercard from Lufthansa.

The latter credit card is given to customers who often fly with this airline or its subsidiaries. On top of that, there are also extra miles, credit interest, travel cancellation insurance, international travel insurance and a fully comprehensive rental car policy. You also get comprehensive travel protection with the gold or platinum credit cards from Netbank.

But be careful: Before you make a decision, it is essential that you read the terms of the contract carefully. Many insurance companies have restrictions. The most important: The service must usually have been paid for with the card, otherwise insurance such as travel liability or travel cancellation will not take over in the event of damage. 

ost of a credit card

Cashback: money back for online shopping

If you increasingly use your credit card for online shopping, bonus programs could be of interest. With so-called cashback programs, as a credit card owner, you receive money back for every payment made with the credit card. Depending on the institute, this is an absolute amount – such as ten cents per card payment – or a percentage of the invoice amount.

As a credit card holder, you also have further advantages when shopping online: Special services such as Internet delivery protection are included with some credit cards. This ensures that the goods arrive safely at the customer.

Which credit card suits whom?

Gold, Platinum and Black, these so-called premium credit cards can sometimes cost a little more. Still, consumers shouldn’t blindly rush for a free credit card. Because: For the higher fees, you will get a lot more additional services in return.

So please don’t be blinded by the zero euro fees. It is better to think about your own consumer behavior before deciding which card to use:

  • For business people and frequent travelers, a gold card is usually worthwhile. Because special credit cards offer special services such as discount systems, concierge service, insurance protection, access to the airport lounge, etc.
  • Anyone who mainly uses a credit card as a practical alternative to an EC card in everyday life is well advised to use a free card as the basic equipment. The best offers – which you can find via our comparison – do not require an annual fee and only small amounts in payment transactions or at ATMs.
  • Students, young people on “Work and Travel ” or people with a bad SCHUFA entries can take the prepaid credit card. Here, all payment transactions are processed exclusively using the existing credit. The cards are a bit more expensive in terms of fees and more complicated to use (the user is responsible for the amount on the card himself, which means transferring and calculating precisely when paying, otherwise the card will not work).
Tim Gumbert
Tim Gumbert
Tim is the go-to guy when it comes to finding all the gems regarding life as an Expat in Germany. His whole motto is discover Germany on your own and without a roadmap, explore new routes while climbing or mountain biking.


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