Published 21.02.2024

Fee-free credit card – fiction or reality?

Fee-free credit card – fiction or reality?

Estonia’s own Holm Bank from Haapsalu developed a credit card with no fees – no interest and no monthly fee. The card has a monthly limit of 100 euros, which must be repaid in full during the following month.

Priit Pekarev, Head of Retail Banking at Holm Bank, explains for whom and why the bank developed such a solution. “The fee-free credit card first and foremost offers clients transparency and cost efficiency, as they do not have to repay more than they actually spent using this card,” says Pekarev. “We have realised from our interactions with clients that while credit cards can be one of the most convenient credit products ever, fears about potential (including hidden) fees sometimes put people off using credit cards altogether,” he comments on typical anxieties related to credit cards.

“While the credit limit of 100 euros may be modest, we see a lot of potential for a card with such a limit due to the consumption habits of our client base,” Priit Pekarev elaborates and outlines the main uses.

  • Among the target groups of this card are young people aged 18+ who are only just getting used to making financial arrangements. It promotes responsible financial behaviour by requiring users to repay during the following month the full amount spent. Using this card encourages disciplined spending habits and does not incur interest charges.
  • At the same time the card is suitable for clients of any age whose spending includes, for example, various subscription-based services such as Netflix, Spotify, Wolt, Bolt, etc. Such costs recur on a monthly basis. Credit card 100 can be linked to specific recurring expenses to keep them under control. You cannot spend more accidentally because the 100 euro limit on the card will not allow it.
  • Priit Pekarev also points out that the card is a convenient option for online purchases. For instance, a person shopping online may not want to use their debit card or a credit card with a higher limit in different online shops abroad for security reasons. Credit card 100, with a monthly maximum spending limit of 100 euros, gives you the certainty that under no circumstances your expenditure can exceed this amount. Of course, Holm Bank’s credit cards are also automatically linked to the Secure Online Shopping (3D Secure) solution.

“Since the card does not have a monthly fee, it will not cost you anything while you are not using it. At other times, such a card can be helpful when some minor unexpected costs occur, or when you have a trip to a remote destination coming up out of nowhere at the end of the month and you need to fill up the tank,” says Priit Pekarev, who is familiar with the needs of private clients.

The card can be applied for on Holm Bank’s website and in the Holm app. As a responsible credit institution, Holm conducts an assessment of the applicant's financial capability. Upon a positive decision, the client receives a virtual card instantly on their phone, while the bank sends a plastic card home by post. All Holm Bank credit cards come with a complimentary purchase insurance.

“Every card user can utilise the Holm app on their smartphone, making card management convenient and providing a comprehensive overview of transactions made, as well as the used and available credit limit," specifies Priit.

“Last year was a year of rapid developments to offer customers exactly the services they need," says Priit Pekarev. "In May, we started offering car leasing; by the end of June, we introduced a refinancing loan, and in December, we launched a personalized Liisi Plus hire purchase, which is a unique solution in our market – you take a picture of the product in the store with your smartphone, or make a screenshot of an e-shop shopping cart, and add the photo/screenshot to the hire purchase application in the bank's self-service portal. The store can focus on selling the product, while the customer deals directly with the bank for the hire purchase plan," explains Priit Pekarev.

“We are thrilled to be able to respond so quickly to the needs of our clients and develop services. This is all possible thanks to the fact that we are a local Estonian bank close to our clients and we have a smart and solution-oriented staff,” Priit Pekarev sums up the topic in one sentence.

Read additional information about the Credit card 100 on our webpage.

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