A credit card is a card that allows you to pay worldwide. Each expense will only be deducted from your bank account at the end of the month.

With a regular debit card, this is always done immediately. The credit card provider borrows you the funds for each payment you make. At the end of the month, the provider will send you a statement with all the payments you have made.

You can settle the total balance within a few days after receipt of the bill. In this case, the advance of the money will not cost you anything. You have actually had a short, interest-free loan.

Not by default, paying in installments

Some credit card providers offer you the option of paying the bill in installments. In this case, you owe interest on the balance which is still outstanding.

In the latter situation we speak of a revolving credit card.

Many consumers prefer to pay the monthly bill in full immediately. In that case, in financial jargon you speak of a deferred debit card or charge card. Deferred means postponed; you postpone the repayment until the end of the month.

Important when going abroad and paying online

With your ordinary debit card, you can only pay in a limited number of countries. A credit card can be used almost everywhere, for example in Asia and Africa.

However, your credit card needs to be a Visa, Mastercard or American Express. These are the three largest credit card payment organisations.

Also, you are often able to pay online with a credit card.

Discounts and savings campaigns

Some credit cards offer interesting additional advantages for the owner. These can vary considerably from card to card.

There are credit cards that allow you to earn points for every use, for example for gifts or even flights. More expensive credit cards often include extensive travel insurance and offer assistance abroad.

Many credit cards also insure all purchases you make towards goods or services when it comes to loss or damages. Sometimes even up to a year.