Representative example: When you spend £1,200 at a purchase rate of 17.9% (variable) p.a. with a fee of £3 per month, your representative rate is 23.7% APR (variable).
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.
As you’d expect, there are a few potential fees to watch out for when you’re paying with plastic in Luxembourg:
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.
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.
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.
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.
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.
Official data lists Luxembourg as one of the worst countries for card fraud. Here are some precautions you can take for increased security:
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.
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