Credit cards in Finland; Going full throttle 

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Finland is a beautiful country, not only in its environment, people, culture but also its fast paced approach to technology. If anything, a short walk around Helsinki will just be enough to give a feel of how much technology is happening up there. The country is very much on its heels to completely digitize transactions and do away with the need to carry bunches and bunches of cash which is not only bulky but also a risk. So, credit cards are the rescue.

Something with credit cards in Finland is not only that they are stylish in outlook but also gives holders a chance to spend over the amount actually in the account. The credit cards give holders a chance to borrow and spend on the go like a boss. That’s a good place to start an amazing journey of Finland. Right? 

This blog will help you to identify a few tricks for choosing a credit card. After all, information is power. Knowing a thing or two about the credit card environment in Finland will help you to make a more informed decision when choosing a credit card. It will also be helpful in understanding how to live through your credit card bills at the end of the month. 

credit card finland

Card payments such as credit cards are on an all-time high as people turn to other payment innovations rather than cash. At some point in one’s life in Finland, the need to own a credit card almost comes out naturally. You just notice that peers have credit cards and are actually liking it. Even those with debit cards still have credit cards on the side because it can just be the critical life saver when one runs out of actual money held in the bank. Also when you need to go shopping for clothes, vacuum cleaner (you can read more about vacuum cleaners at stø or anything else that is labeled consumer goods.

Necessary and critical as it may be to own credit cards in Finland, one must hold it in the back of mind that the card is a pathway to borrowing. This just means having a credit card comes with a need for high financial discipline lest you end up missing your possible liquidity by  many miles. Most people fall for the mistake of not viewing credit cards as a loan and this could be the reason why some misuse them. 

Important things to  carefully watch out for in getting a credit card in Finland

You should always remember that credit card providers, including those in Finland, expect you to pay bills and other credit card charges at the end of the month. If used adequately, a credit card can be a convenient payment method especially for large purchases. Finland is increasingly becoming a card-centric country so it helps to understand its credit card environment.  

According to the 2015 World Payments Report, people in Finland made an average of 450 non-cash payments in 2013. This was more than any other country and thanks to innovations in the payments system, and a strong economy and private spending. Besides, the cold winters in the country have really encouraged these modes of payment. 

Fast-track to 2021 and the yearly value of card transactions in the Finland cards and payments market was $71.8 billion.  This is not all though, forecasts indicate that this market is likely to grow by more than 5%. This is why this blog focuses on the general credit card environment in Finland. We hope that you can find a lot of useful information that can help you make a decision about credit cards. 

Card-based payment market in Finland

You will be pleased to know that the card based payment market in Finland is very well developed. This can be linked to the high level of awareness of electronic payments in the country. As a matter of fact, most people prefer to pay using credit cards instead of cash for most large purchases. Maybe this has something to do with their high trust levels for cashless transactions which is attributed to the government interventions and general technological awareness among the people. Just to a little poke anyone planning a relocation to Finland, it is not excusable not being techno savvy in Finland which should automatically translate to embracing credit cards. 

The increasing advancement in the credit card  sector in Finland can also be attributed to the high banking penetration in the country. You will notice that there are many banks in the country and almost all of them offer credit card services. The credit card features from each bank will differ including the charges and reward systems. 

Banking sector credit cards in Finland

The banking sector in Finland  is much liberalized as is the case in most European countries. The stiff competition in the market has forced providers to develop more innovative products. Finnish banks are committed to making payment as easy as possible for their customers. So, they try to find as many innovative products as possible when it comes to credit cards. Your goal therefore, is to find a credit card that best suits your needs and budget. 

Thus, in Finland, you will be free to choose a credit card from a range of highly innovative products. No one credit card is so bad they should not be considered. So make sure you shop around to identify the best. However, this can be a daunting and time-consuming process especially if you have only scanty information about the credit card environment. 

Finally, the increased popularity of credit card payments in the country is because of the well-developed payment acceptance infrastructure. Most business establishments accept credit card payments in the country. Even some rural areas boast of a high credit card acceptance rate which cannot be said for other European Union countries. 

Hence, the Finnish payment card market is dominated by credit cards. However, you should note that debit cards are still the leading payment method in the cards sector. Most customers continue to prefer debit cards for payments. Recently though, this trend has shifted with some of them moving to credit cards thanks to their growth in the country. 

The Market Dynamics in the Cards and Payments Market in Finland

The 2020 COVID 19 pandemic that hit the world equally affected the credit card market in Finland. Thanks to its influence on consumer spending, it also led to a paradigm shift in the payment methods in the country. Similarly, the sector received a heavy boost from the gradual revival of economic activity and the vaccination program in 2021. Credit card spending in Finland increased considerably.  

This is a really impressive upward growth because most people reverted to online shopping during the lockdown. One would expect thus, that e-commerce payments would experience a robust growth at the time. However, the opposite happened and credit cards became more popular instead. According to financial reports in Finland, overall e-commerce payments in the country registered a marginal decline in 2020. 

I guess the decline in e-commerce transactions in Finland in 2020 could had something to do with the crush in service sector as a result of Covid-19 outbreak. Less and less people were into traveling or looking for accommodation thanks to the lockdown and overall fear. These two sectors are characterized by high-ticket purchases that boost the e-commerce market. We should however, remember that domestic tourism activities are fast returning to normal. 

Consumers have also continued to enjoy online shopping so credit card payments are likely to continue on an upward spiral. This will be highly influenced by the fact that Finland is one of the most developed contactless card markets. Most people have continued to prefer contactless payments to avoid contact. So, maybe credit cards are in for even bigger changes. Stay on this blog to find out how the environment changes and when to expect these changes. It will also provide useful information on how one can adapt to these changes. 

Why Credit Cards are Important for you in Finland

When used effectively, credit cards can be a convenient and secure payment method in Finland. With them handy, you can build credit and simplify your budgeting not to mention the rewards they offer. What’s more, if you are careful enough, you won’t have to go into debt, and you don’t have to pay interest. Let’s look at some reasons why credit cards are valuable. 

1. Credit Cards are Safer to Carry and Use

Gone are the days when people would lose their cash after losing their wallets or getting robbed. I have been a mugging victim myself so I understand how traumatic it can be. You shouldn’t have to lose your valuables on top of that experience. 

This is why credit cards are convenient. When your credit card gets stolen and the person goes on a spending spree with your credit cards, it is not that bad. This is because you are not held responsible for fraudulent credit card purchases. The only downside is that sorting out the mess may take time, but this is okay as long as you don’t lose money. 

2. Credit Cards will earn you Easy Rewards

Providers will include credit card rewards to encourage customers to use the cards. For instance, some cards have a simple flat-rate that pays the same amount on every purchase. They offer 1.5% or even 2% cashback on every dollar you spend. Some cards can also treat this amount as points or miles to redeem for travel or other things. It implies that if you spend $1,000 a month, you earn $180 to $240 a year without any extra effort.

You might also be pleased to know that some providers offer higher rewards in distinct spending groups, such as groceries, gas or restaurants. So, if you add all your credit cards together, you can get significant rewards. 

 It would be wrong of me to fail to caution against spending more than you had planned to just to get rewards. Remember that the reward cannot possibly make up for that additional $100 at the grocery store or that additional $250 worth of clothes. Also remember that if you carry a balance from each other month, you might end up paying more interest. This will automatically render your rewards useless. 

3. Credit Cards help you track Spending

To survive and enjoy the complete Finnish experience, it’s important to stay ahead of your finances. Managing your money will only be possible if you can keep track of your spending. This is already challenging enough in any economy you shouldn’t have to have trouble figuring out where you spent your money. 

This is where using a credit card can come in handy. It will be easier to keep track of your spending even if you misplace a receipt or forget to enter a check in your register. A credit card will list all your expenditure in your account online at all times. You can access this information at any time even right after a purchase. Besides, most providers automatically group purchases according to the businesses. 

Furthermore, larger providers allow you to generate reports to see how much you’ve spent in different groups each month. You can also find annual or other periodic records based on what you are looking for. Finally, credit cards make it easier to use budgeting apps. They allow you to import data from your credit card usage history. It simplifies fitting every purchase into a budget category. Subsequently, you can identify areas where you spent too much or what you mostly splurge on.

4. Credit cards help build  the much needed credit history

With a credit card, you can improve your credit history and attain a higher credit score. However, this does not mean that good credit is based on having a credit card. You can still build good credit through other ways. As long as you continue to use your credit card responsibly, you also improve your credit scores. 

In Finland like in many other countries, a good credit history will open many doors for you when it comes to your finances. For instance, you will have little to no trouble finding housing. The landlord will be more open to renting to you and the same goes for mortgage companies when you are buying a home. 

This is also true for mobile service providers, insurance agents and utility companies when determining your eligibility and rates. Furthermore, in some cases, you stand a higher chance of landing a good job with an excellent credit history than a bad one. With a credit card, making regular small purchases, keeping your balances low and paying your bills on time will improve your credit score over time.

Important Facts about Credit Cards in Finland 

I’m sure at one point or another you have heard a horror story or two about credit cards. Just like other payment methods, credit cards also come with a warning label. Though not included on the product itself, there are a few things you should know about using credit cards. They might come with a few challenges based on how you use them. Let’s look at some of the common precautions when it comes to credit cards in Finland. 

Getting a credit Card for the Right Reason 

Like other forms of loans, you might find yourself getting a credit card for all the wrong reasons. This is a huge mistake to say the least. Don’t just get it for the sake of having one. Even an unused credit card is still considered a loan so it might affect your creditworthiness.  

Similarly, once you have your sights set on getting a credit card you should shop around. Never just go for the first credit card you come across. You should pick out a credit card judiciously after conducting adequate research on credit cards. As important as a credit card limit might be, there are other factors that matter too. 

These include the joining and renewal fees that a credit card may offer. It will go a long way in saving and organizing your finances. Also, consider the rate-of-interest, billing cycle, and fees and charges for late payment. This information will also help you to make a more informed decision when picking out a credit card. Like I said, it’s a huge decision so don’t take it for granted. 

Credit cards for business owners should also be given extra scrutiny before picking a provider. For instance, you should find out about the supplementary cards that will be provided to your employees. Use the business cards for their additional tools like a breakup or analysis of your spending. These tools help you keep track of your expenditure and may also help you in your analysis for a credit card. 

Offers on credit cards in Finland

Depending on your provider, there are various offers that come with credit cards. Providers use these offers to entice customers to subscribe to their services. A good example of these are cashbacks. However, don’t get carried away by these offers and forget other features, as much difference as they may make. 

Remember the reason why you decided to get the credit card in the first place and find one that best suits these needs. Also note that some credit cards include special deals on dining, some on petrol and others on travel. So, look for one that has a special deal on your primary reason for getting the credit card. 

Not to mean that you should focus primarily on freebies. Complement it with information on interest rates and charges that come with the card. Don’t get stuck with a card that makes it impossible for you to pay other bills at the end of the month. Only go for a card that you can afford. Let the other things that come with a card be an added advantage otherwise you might end up buried in credit card debts. 

Credit card Balance Transfer in Finland

Unorthodox use of a credit card can lead to spending more on your credit card than you are able to repay. This can be very unfortunate since unpaid credit card debts attract very high interest rates that might affect your finances. This can lead to a fast downward spiral and you might soon have a big unpaid amount on your bills. 

A balance transfer allows you to get a new credit card and transfer the outstanding amount to that new card at a competitive rate. This is also possible for an existing credit card as long as you have a credit balance available on that card. A balance transfer is a fairly effective way of reducing your debts by seeking better interest rates. 

You should be careful though because if done wrong, it might do more harm than good. So take precaution not to hit the upper limit on the credit card that you are transferring your debt to. It could negatively affect your credit score in the end. Hence, focus on the interest rate and the conditions that come with it. For instance, some providers change interest rates on a monthly basis. So, be on the lookout for these changes. 

For example, a credit card that charges an interest of 4 % per month ends up charging 48% per year. This is very expensive so check them out before you settle on a provider. Also check the associated fees and finance charges that will come with balance transfer. 

Having more credit cards than you need in Finland

Just because you can have more than one credit card does not mean you should. A credit card is an unsecured loan in itself even if you don’t use it. So, applying for too many credit cards will definitely affect your credit profile. Just apply for credit cards that you really need otherwise stick to a single card. 

Having too many cards can make it more difficult to keep track of your spending. So, you might end up spending more than you can pay back leading to more debts. Also, avoid making only minimum payments, paying the bills late and exceeding the credit limit. With this in mind, your credit card journey should be rather smooth.