Paying by credit or debit card is convenient. But it can be unnecessarily expensive. Here you will find tips on how to use your plastic card without the need for unnecessary costs.
What is the total cost of your credit and debit cards?
If you want control over the costs of your credit card, you must ensure the total annual cost. There is much to consider here, such as monthly costs, interest, fees, possible withdrawal fees and annual fees. When all this is added up, you can see what the real cost is – and then compare it with other alternatives .
It may also be a good idea to take control of the situation if you have several different credit cards. Having multiple cards can be handy if you want to keep different costs apart. Or if you want a backup alternative for, for example, a trip abroad. But several cards also mean more fees.
So if you only look at the cost, then it is usually best to have as few cards as possible.
Compare the benefits of different payment and credit cards
Different credit cards can provide different benefits. This may include an enhanced travel insurance (in addition to what is included in your home insurance) when you pay for a trip with the card.
Credit cards are also commonly associated with various bonus programs, for example at airlines. You then get points for all your purchases, which you can then exchange for trips or upgrades.
If you travel abroad often, it can also be valuable to know if your credit card company can arrange a replacement card wherever you are, if your wallet or purse should be stolen.
Should I choose local or Swedish currency?
Often you get two options to choose from when paying with a Swedish credit card abroad: Do you want to pay in Dollar (USD) or in the local currency?
The rule of thumb is to always choose Dollar. On the other hand, it will be easier for you to keep track of how much money you are spending if you know exactly how much will be deducted from your Swedish account. On the one hand, you avoid any fees and commissions for currency exchange. Knowing how much a local payment provider takes in commissions between a foreign amount and what is actually charged to your account is often simply not knowing.
Also, keep in mind that ATMs abroad often charge a fee when you withdraw cash in local currency with a Swedish card. As a rule, it is better to buy foreign currency in Sweden, before traveling. Also remember that many smaller restaurants and shops on the continent do not take cards, but only cash.
In addition, you should check if your credit card company and your bank charge currency exchange fees or not. This can be important in cases where you do not have the opportunity to choose between Swedish and local currency when paying abroad.
Clean up your credit cards
If you have several different credit cards, it may be time to clean them up, to bring down the costs. This is especially true if you have debts on cards that you rarely use, which makes the fixed fees extra noticeable.
As a rule, debit cards (where money is deducted directly from your account) are cheaper than credit cards (where you get a credit for a period of time), as they later entail interest costs.
One tip might be to have only one or two cards for your private spending. Then, in principle, it is always better to pay off all your credit card debts with a regular private loan, which has lower interest rates and costs. Then you end the cards you are not using. It is often possible to save a surprising amount of money each month with such a large cleaning.
But of course, this is based on comparing different loan offers for your private loan and choosing one that is favorable.