People don't really use credit in the Netherlands. This is sort of a fuzzy statement, because the way bank accounts work is different (there seems to be a small credit facility so if you overdraft, you don't get huge fees, as long as you cover it quickly). But everything is essentially a cash payment, altho it is as often as not done using a chip-and-pin payment card. The cards have a computer chip and the computer chip has a program on it which when inserted into a payment machine controls how the transaction occurs. The pin part is authentication. The account number is not secured (just like your checking account number is printed on every check you have). Magnetic stripe cards are usable in cash machines (at least in theory) but are difficult to use elsewhere and the difficulty is escalating rapidly. We used a credit card exactly once on this trip: for the car rental.
According to our host in Diever, no one will take (including banks that you don't already have a banking relationship with) E200 or E500. The claim was also made that they won't take E100, and places like the fry shop and the kiosks that do ride fotos at Efteling have standardized signs indicating they do not take E100 and above. However, we had no difficulty using E100, as long as the change back from the transaction was going to be less than E20 (or thereabouts). So groceries, gas and substantial souvenir purchases all took E100 with no complaint. I always asked before pulling one out. R. says they carefully visually inspected the one he used. The Albert Heijn had a machine they ran it through.
While it is customary when renting a home, apartment, etc. from an owner to pay in full in advance, it is less customary to pay for a hotel in full in advance, at least in my experience: you do it to get a better rate, not because you have to. However, Efteling Bosrijk required full payment for a cottage (I forget how far in advance, but it was weeks). Our rental in Diever took PayPal (woot! Very convenient!). Efteling required a wire transfer.
We've gotten into the habit of grilling people who come back from trips to Europe how they paid for things. We're very annoying that way, and have thus collected a rash of stories about long waits at restaurants in big cities that didn't know how to deal with a magnetic strip credit card and wound up having to bring over a manager and then call the bank to figure it out.
Also, E1 and E2 are coins, not paper -- the smallest paper is E5. There is no penny; the copper coin is what we would think of as a nickel. The polite thing to do at a store which calculates to the penny (such as an Albert Heijn) is to wave back the last partial nickel -- they will figure it in your favor and offer, but you should say no as it will make them happy and cost you nothing to speak of. Banks charge businesses for rolls of coins, so you really will be asked for change to make things work out with the least number of coins going your way (not by value, by number). If you're having trouble figuring it (I do, because of that whole penny thing not existing), stick a bunch on your hand and let them figure it out. They'll be happy.
Lobby your financial institutions to implement chip-and-pin. Please.