Why pay for a credit card?

If we take into account that stores have already factored into the price of goods the cost of the commission charged by credit card companies, we feel that it makes sense to pay by card. Haggling to get a reduction for paying in cash in a language that isn’t your own isn’t easy, even if you speak Spanish well your request may be met with astonishment.

Having said this, what we don’t advise is using the credit facilities (at over 20% APR in most cases) that come with the card. In Spain most companies will still ask you when you request a card if you are going to pay in full at the end of each month or use their credit facilities. Even though you can change this decision in the future, if you choose the “pay in full” option this is a good way to avoid the temptation to impulse buy and repay in instalments.

Some banks do offer their customers credit cards with no annual fee for life, such as ING Direct but these hardly ever have points or rewards programmes. Additionally we’ve seen fantastic offers which, when you read the small print, are only for the “payback in instalments” offers, such as the Iberia Sendo card offered by some banks with the offer of 600 Iberia points – the equivalent of a return national flight – but you have to agree to pay at least 400€ in instalments during the first few months.

You need to be careful when considering those cards that have as beneficiary a charity (paid directly by the bank on your behalf). The “cash back” amount (that which goes directly to charity) varies but tends to be around 0.7% (if you spend 10,000 € a year, 70€ would be given to the organisation concerned). In some cases the annual fee is also donated.

Below there’s a list of some of the best deals currently around with those entities that don’t require you to have an account with them and are for payment in full at the end of each payment period.

BANCO POPULAR-E.COM – VIPS Visa / Travel Agency Visa

If you often eat out at one of the VIPS restaurant group (www.grupovips.com) the credit card offered by Banco Popular-e (their internet version only, not Banco Popular branches) gives cashback in VIPS points (vouchers worth either 3 or 6 euros depending on the day of the week and time of day they’re used). To maximize this cashback you should also be using the Club VIPS card (pick up a leaflet in any of their restaurants).

Charge: Free for life as long as you spend 300 euros per year, otherwise 9 euros annually

Cashback: 1% of all purchases in VIPS points sent in vouchers with a validity of 3 months

Alternatively, if you travel more than you eat out, this bank also offers a similar deal with 1% of all purchases returned as either Halcón Viajes or Viajes Ecuador vouchers.

Website: http://www.bancopopular-e.com/

MBNA – Sports credit cards (“horse riding” Mastercard or “tennis” Visa)

Charge: Free for life (internet offer only or existing customers)

Points programme: “Mas”, online catalogue

Observations: Up to 56 days of credit when you pay in full at the end of the period.  http://www.mbna.es/index.html

CARREFOUR – “Tarjeta Pass” Visa

Charge: Free, additional card also free

Cashback: 1% of all purchases (not just limited to Carrefour) included in your quarterly account, to be redeemed on purchases at Carrefour.

The card can be picked up in store: http://www.carrefour.es/pass/tarjeta-pass/que-es/

 

This thread has been closed from taking new comments.