Credit card with BKR: what are your options?

Applying for a credit card with a BKR registration can be a challenge. Many Dutch people run into a wall of rejections when they want to apply for a credit card while registered with the Bureau Krediet Registratie. Whether for a vacation abroad, online purchases or just that extra financial security, a credit card is sometimes indispensable in everyday life. We'll take you through the world of credit cards and BKR registrations in this complete guide.

You will learn not only what is and is not possible with a BKR registration, but also what alternatives there are and how you can possibly get rid of your negative BKR registration. Because a negative BKR registration doesn't have to mean the end of your financial options.

Applying for a credit card with a negative BKR registration

With a negative BKR record, applying for a regular credit card becomes a lot more difficult. Banks and credit card companies see a negative BKR code as a risk indicator. They are reluctant to give you credit because you have had payment problems in the past.

Still, there are several options if you need a credit card while you have a negative negative registration have:

Prepaid credit cards

A prepaid credit card offers a solution if you want to be able to pay worldwide without BKR testing. With these cards, you deposit money on the card in advance, so there is no credit. You can never spend more than the amount you have charged.

Advantages of a prepaid credit card:

• No BKR review or registration
• Use worldwide like a regular credit card
• No risk of debt or additional BKR registrations
• Complete control over your spending

Do keep in mind that these cards usually cost more to purchase, recharge and use. Therefore, carefully compare the terms and conditions of different providers.

Credit card based on collateral

Some providers offer a credit card where you deposit a sum of money as a security deposit. This amount serves as security for the credit card company. It works as follows:

For example, you deposit €1000 as a deposit, then you get a credit card with a limit of €1000. Should you be unable to meet your payment obligations, the credit card company uses your deposit to settle the debt. This construction is less known in the Netherlands but is offered more often abroad.

Apply for credit card through a partner

If your partner does not have a negative BKR record, that person can apply for a credit card and give you a second card on the same account. Officially, you are then not a contractor but may use the card. Note that in this case, your partner remains fully responsible for all expenses.

This option obviously requires a great deal of mutual trust, but can be a practical solution for households where one partner is struggling with BKR issues.

Credit card and BKR in practice: what do you need to know?

If you are using or considering a credit card, it is important to understand how it relates to the BKR system. There are some practical aspects to consider:

Do you always get a BKR registration from a credit card?

No, not always. It depends on the type of credit card and your payment history:

Direct debit credit cards: If you pay off the full amount each month in one go (within 30 days), you will not get a BKR registration. This is the case with many standard credit cards from Dutch banks.

Credit cards with installment payments: If you pay off in installments or use the revolving credit feature, you do get a BKR registration because it is then considered a revolving credit.

When does a credit card registration become negative?

You get a negative BKR registration (A code) if you haven't paid your credit card bill for more than 90 days. This can happen if you:

•  Have the monthly debit reversed
•  Have insufficient balance for direct debit
•  Deliberately not paying the bill

The exact time frame may vary by credit card company, but usually they use the legal standard of 90 days before registering a default as problematic.

Impact on your mortgage and other loans

An often underestimated aspect is the impact of a credit card on your borrowing capacity with other financial products. With a mortgage the entire credit limit of your credit card counts in the calculation, even if you never use this limit in practice.

Suppose you have a credit card with a limit of €2,500, mortgage lenders will assume that you have withdrawn this amount in full. This can significantly limit your mortgage options. On a modal income, this can quickly mean €10,000 to €15,000 less mortgage.

Tips to optimize your borrowing capacity:

•  Lower your credit limit temporarily if you want to apply for a mortgage
•  Consider canceling your credit card if you don't use it often
•  Choose a prepaid credit card instead of a regular credit card