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Credit Card trendshift in Norway

More and more Norwegians are using their credit cards for everyday life products, like food, milk, medicine and parkingtickets. Are you among one of them you use your creditcard every day? The norwegian Forbrukerrådet say that this is a risky trend for consumers that leads to more expensive products and services. Now the Norwegian government is thinking about regulating the market.

Traditionally norwegians have used their creditcard mostly for travelling and more expensive capital goods, but recently something has happened, daily use in supermarkets and everyday life products is rapidly expanding. This shifting trend is unraveling in a study done by Eurocard has made on 100 000 nordic users between 2014 and 2016.

The last two years small daily purchases has increased by 25-30%, but it is apparently coming from low levels. The increased usage of credicards is primarily due that the supermarkets has enabled payment with creditcard, that previously has not been possible. The largest food and grocery conlglomerate in Norway, Norgesgruppen, say that the usage of creditcards has increased by 7% the last year, and that the supermarket chains with to provide for the payment solutions the custumers prefer.

According to Eurocard this shifting trend has not led to more creditcard default or higher debt, because the most of the customers pay all their creditcard debt at the first invoice, thus not paying any interest rate on their creditcard usage.

We think this shifing trend is a natural development of creditcard usage and the creditcard market,  since almost all creditcards have offers tied up to creditcard usage. There are several creditcards that have give rebates every time you: buy grocieries, gasoline, use the card in specific stores and so forth. If you want to get these rebates you need to use the creditcard. For example the Ya Bank card has 3% rebate on all grocieries, and Bank Norwegian Visa gives you 1% bonus on airline tickets for all creditcard usage, and Circle K Mastercard give rebate on gasoline filled at their petrolstations and Ikano Visa gives you rebates on all creditcard usage.

Some people think that increased usage of creditcards for small daily purchases is a trend that is not very good, since it could be tempting to use more credit that you can afford. That can lead to you getting into credit debt problems. For structured and diciplined users creditcard usage can be profitable due to all the different rebate- and bonus programs.

The director for finance in Forbrukerrådet, Jorge B. Jensen warns that the new trend can lead to more expensive goods and services because the international payment system for creditcards is much more expensive than the local BankAxept solution with debetcard payment solutions. The creditcard solutions can be up to 10 times more expensive. The higher costs for creditcard usage should cover the interest rate free period and the benefit programs (kickback, bonuses and rebates) for the users.

We think that a healty economy sholuld have all possibilities for the consumers, that you should be able to use debit- or creditcards as you prefer. Read about how norwegians use their consumer loans – hvordan nordmenn bruker forbrukslån.

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About Magnus Ludvigsen