Using a credit card in Luxembourg

Luxembourg has a strong economy and finance sector, but using a credit card isn't too convenient there.

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Chris Lilly

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Credit cards aren’t too popular in Luxembourg compared to other European locations, which might be surprising when you consider how many people visit from other countries. There are 150 banks, yet there are plenty of retailers that will insist on cash payments instead of plastic.

Luxembourg has several official languages and around half of the people who work in this country commute from outside the small nation’s borders. There aren’t exactly any vast wildernesses in Luxembourg, but if you’re heading out to “Little Switzerland” (a popular rural area in the east of the country) with its smaller retailers, cash may be your safest bet.

Mastercard and Visa are most commonly accepted in the Benelux territories, though you will find some merchants accepting American Express.

What about fees?

As you’d expect, there are a few potential fees to watch out for when you’re paying with plastic in Luxembourg:

  • Foreign transaction fees. A non-sterling fee of around 3% per transaction can apply, depending on your credit card. That’s £15 in fees for every £500 spent with your card.
  • Merchant currency conversion fees. Sometimes, a merchant will offer to take payment in pounds instead of in euros. This is known as a dynamic currency conversion (DCC) and it can mean higher fees than if you simply paid in the local currency.
  • Card payment surcharges (charged by the merchant). If you’re using a Visa or Mastercard from an EU bank, you won’t need to worry about card payment surcharges.
  • Cash advance fees. Your card issuer may charge a fee for cash advances (withdrawing cash using your card).
  • Cash machine fees. The provider of a cash machine may charge a fee if you withdraw cash using your card.

It’s also worth noting when it comes to cash advances and non-sterling transactions, many card issuers will start charging interest on the day your account is debited, rather than the customary “up to 55 days interest-free” that usually applies provided you clear your balance in full each month.

EU ban on credit card surcharges

In January 2018 the EU required member states to adopt the Payment Service Directive 2 (PSD2). The PSD2 is a ban on card payment surcharges – when a retailer adds a fee because you’re paying using a credit card. However, it’s important to note there are limitations and exceptions to this directive and there are other fees that may apply when you pay by credit card. If your card is from a non-EU bank, uses a network other than Visa or Mastercard or is a business/corporate card, then the merchant may still levy a surcharge.

How can I avoid the fees?

Consider taking out a credit card offering commission-free currency conversion (see table below), even if you only use it when you’re out of the country. These cards will convert currency at the standard Mastercard or Visa rates

Once you have one of these cards, if a merchant offers to take payment in pounds, say you’re happy to pay in zloty, since you know that your own bank won’t add a margin.

Generally speaking, it’s not a great idea to use credit cards to withdraw cash, but some travel credit cards won’t penalise you for this either.

Are American Express cards accepted in Luxembourg?

American Express is most likely to be accepted in the upper and middle brackets of the country. However, it can be difficult to find ATMs that will accept Amex throughout the country. Additionally, merchants may levy a surcharge for Amex payments.

Contactless and chip-and-PIN payments

In Luxembourg, you can use contactless payment for any amount. If opting against a contactless payment, you won’t need to enter a PIN for purchases below €25.

Is it safe to use my credit card in Luxembourg?

Official data lists Luxembourg as one of the worst countries for card fraud. Here are some precautions you can take for increased security:

  • Use an ATM within a bank. If for some reason the ATM eats your card, you’ll be able to quickly retrieve it. Also, ATMs within banks are less likely to be tampered with. Should you use one outside a bank, check for devices attached to the reader and cash return slot.
  • Consider taking an additional credit card. You can use your primary card for payments and keep your back-up card in your hotel room safety deposit box. That way, you’ll never be left without money.
  • Keep your card in sight. Card cloning is rare in Luxembourg, but just in case, don’t let your card out of your sight.

How to prepare before traveling to Luxembourg

  1. Get a credit card without foreign transaction fees. If you travel often, avoiding the 3% foreign transaction fee can save you a lot of money. Consider getting a travel credit card to avoid the foreign transaction fees.
  2. Opt for a Mastercard or Visa. They’re the most-widely accepted cards worldwide and Luxembourg is no exception. You won’t be able to use your American Express cards in some locations, which makes a Visa or Mastercard even more useful in Luxembourg. There are also enough ATMs around if you want to withdraw cash with these cards as well.
  3. Carry a back-up card. Try to always carry a second card when traveling abroad, given you don’t know what could happen to your primary card.
  4. Get some cash. In general, you can pay with plastic almost anywhere in Luxembourg. If you want to make a cash withdrawal, keep in mind credit cards have additional fees while most debit cards don’t.
  5. Inform your bank you’re traveling to Luxembourg. If you don’t let your bank know ahead of time the dates you’ll be away and where you’ll be, it may block your card if it suspects the charges are fraudulent.
  6. Make a note of your bank’s phone number. If you lose your card or have payment issues, you’ll be able to call the bank to resolve it.

Bottom line

If you travel to Luxembourg, you can safely use your credit card to make payments and withdraw cash. You’ll just have to be careful to not incur fees you can otherwise avoid. With a decent travel credit card, you’ll avoid paying foreign transaction fees. By simply declining the DCC when offered, you’ll also avoid a poor exchange rate or commission.

Compare cards with fee-free currency conversion in Luxembourg

Table: sorted by representative APR, promoted deals first
Updated daily
Name Product Finder score Finder score Foreign usage charge (EU) Foreign usage charge (rest of world) Purchases Annual/monthly fees Representative APR Link Incentive Representative example
The Royal Bank Credit Card
The Royal Bank Credit Card
4.5
★★★★★
★★★★★
Expert analysis
0%
0%
12.9%
£0
12.9% APR (variable)
Go to site
Read review
Representative example: When you spend £1,200 at a purchase rate of 12.9% (variable) p.a., your representative rate is 12.9% APR (variable).
NatWest Credit Card
NatWest Credit Card
4.5
★★★★★
★★★★★
Expert analysis
0%
0%
12.9%
£0
12.9% APR (variable)
Go to site
Read review
Representative example: When you spend £1,200 at a purchase rate of 12.9% (variable) p.a., your representative rate is 12.9% APR (variable).
Santander All in One Credit Card
Santander All in One Credit Card
4.5
★★★★★
★★★★★
Expert analysis
0%
0%
0% for 15 months reverting to 23.9%
£3 per month
29.8% APR (variable)
Check eligibility
Read review
0.5% after £1 of monthly spend. Maximum of £10 cashback paid per month. Cashback paid Monthly into Card Account. Maximum spend for cashback purposes is limited to credit limit.
Representative example: When you spend £1,200 at a purchase rate of 23.9% (variable) p.a. with a fee of £3 per month, your representative rate is 29.8% APR (variable).
118 118 Money Guaranteed Rate Card
118 118 Money Guaranteed Rate Card
3.5
★★★★★
★★★★★
Expert analysis
0%
0%
34%
£0
34% APR (variable)
Check eligibility
Read review
Representative example: When you spend £1,200 at a purchase rate of 34% (variable) p.a., your representative rate is 34% APR (variable).
NatWest Reward Black Credit Card
NatWest Reward Black Credit Card
4.0
★★★★★
★★★★★
Expert analysis
0%
0%
21.9%
£84 per annum. Reward Black Current Account holders: Year 2 onwards - £0 per annum
40.7% APR (variable)
Go to site
Read review
You'll earn 1% back at supermarkets and 0.5% back everywhere else, including supermarket petrol stations. At selected retailers, you could earn 1-15% back.
Representative example: When you spend £1,200 at a purchase rate of 21.9% (variable) p.a. with a fee of £84 per annum. Reward Black Current Account holders: Year 2 onwards - £0 per annum, your representative rate is 40.7% APR (variable).
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We show offers we can track - that's not every product on the market...yet. Unless we've said otherwise, products are in no particular order. The terms "best", "top", "cheap" (and variations of these) aren't ratings, though we always explain what's great about a product when we highlight it. This is subject to our terms of use. When you make major financial decisions, consider getting independent financial advice. Always consider your own circumstances when you compare products so you get what's right for you. Most of the data in Finder's comparison tables has the source: Moneyfacts Group PLC. In other cases, Finder has sourced data directly from providers.

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