Credit card interest rates allowed to rise to 15 percent in the Netherlands

The maximum credit card providers may charge on consumer credit, also known as the maximum credit compensation, will rise from 14 percent to a maximum of 15 percent as of January 1, the Ministry of Finance announced on Monday in a press release.

This increase is attributed to the proposed rise in the statutory interest rate from 6 percent to 7 percent, which is linked to the interest rate of the European Central Bank (ECB). Over the past six months, the ECB has been increasing its interest rates in an effort to control high inflation.

The maximum credit compensation comprises two parts: the variable statutory interest rate and a maximum surcharge. Therefore, the rise in the statutory interest rate leads to an increase in the total maximum credit compensation.

“Borrowing money, overdrafting and purchasing on installments can therefore become more expensive,” the ministry wrote in the press release.

The Ministry of Finance warned against hastily taking out loans. "It can sometimes be very tempting to take a short-term loan, for example, for large purchases or unexpected expenses. But with rising interest rates, these loans will ultimately become more costly," they wrote.