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Banks & Taxes in Germany
Payment Methods in Germany
Are you used to simply flashing your credit cards whenever you purchase something, no matter how small? In Germany you may need to get accustomed to pay in cash more often. Our Relocation Guide to Germany talks about the local currency, available methods of payment, and the acceptance of plastic money.
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When it comes to paying for purchases, Germany is still something of a cash country. Don’t be surprised if you see, very occasionally, someone pay e.g. for a pair of designer shoes in cash. Sales assistants prefer customers to use cash for small purchases. Some shops may only accept plastic money for sums above a certain limit (i.e. higher than 10 or even 20 euros).
Currency in Germany
Germany is not only a cash country: sometimes, you may hear Germans talking in an almost sentimental manner about how they used to pay with Deutsche Mark, the former German currency. After the Second World War, the Mark, the German currency in the new Federal Republic, became a popular symbol of economic recovery, purchasing power, and the rise of consumerism. Combined with the various crises in the Eurozone, this can lead to some ongoing nostalgia for Germany’s old currency.
Moreover, as far as paying for their daily needs is concerned, some people in Germany also like complaining about high prices. To emphasize their point with arithmetical expertise, they often turn the sum they have to pay in euros into Deutsche Mark by doubling it. Not only does the result appear a lot higher, but it also ignores the inflation of the last dozen years. (You can find more accurate information on living expenses in our guide to cost of living in Germany.)
Hard currency was first converted in the Eurozone from January 1, 2002. In Germany, you can pay with bills of EUR 5, 10, 20, 50, 100, 200, and 500. For paying in small change, you have 1, 2, 5, 10, 20, and 50 cent coins, as well as 1 and 2 euro coins. They show different national emblems, representing the various European countries, but they are valid in the entire Eurozone.
Although it is common in Germany to pay in cash, some places such as small grocery stores or newsagents only accept payment with bills up to EUR 50 or 100. These vendors don’t necessarily fear being swamped with customers dealing in counterfeit bills; they are rather afraid of running out of change.
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Automated Teller Machines (ATMs)
Since you are dependent on cash to pay for smaller purchases, you usually have easy access to automated teller machines (Geldautomaten). Nearly every German bank has a 24/7 ATM center somewhere in the building, and in the city center it is rarely hard to withdraw cash from a machine nearby. You should definitely consider the fees, though. You can withdraw money from any machine with a credit card. However, the ATM provider as well as your own bank may charge you for the transaction. And if your bank account is not in euros, you have to pay for the exchange rate as well.
The withdrawal fee charged by the ATM provider is usually a fixed amount of EUR 4-6. All other rates are determined by the bank issuing your credit or debit card. On all ATMs, you can find small signs or stickers listing the banks, credit card networks, and cashpools they are affiliated with. These normally include Master, Visa, and Cirrus. The costs for maintaining a German bank account are relatively low compared to withdrawal fees, and it is not much effort to open one. While you are living in Germany, a local bank account is the easiest way to avoid ATM fees.
A lot of smaller shops will not accept your credit card (Kreditkarte). There are even some larger supermarkets that do not accept credit card payments, either. This may be a surprise if you are used to paying for your groceries with a credit card. Larger restaurants and hotels generally accept credit card payments, but not necessarily all types of card, whereas tiny B&Bs may not take any credit cards at all.
There’s often a sign at the door indicating which cards (if any) are accepted. The most popular credit cards in Germany are Master, Visa, and American Express.
Crime in Germany is fairly low. But if your credit card is stolen after all, please call one of the following numbers at once:
- Master Card: 0800 819 1040
- Visa: 0800 811 8440
- American Express: (0)69 97 97 1000
- Diners Club: (0)180 2345454
Debit cards are also known as Eurocheque-Karte, EC-Karte,or girocard. In Germany, they are far more widely accepted than credit cards. Retailers prefer the instant debit card payment to credit charges. Debit cards are linked to a checking account and used for direct payments as well as ATM withdrawals.
If using the EC-Karte is your preferred payment method, don’t be surprised when you are not asked to enter your pin code. Lots of cashiers at the supermarket only take a brief look at the signature on the receipt. This means that debit card fraud is theoretically easy.
Make sure to immediately cancel your card when you lose it. Call +49 (0)1805 021021 or +49 116 116 to do so.
Also keep in mind that sometimes it is only possible to make one withdrawal at a time. Therefore, you may not be able to pay two separate bills at the supermarket. A daily withdrawal limit may be imposed as well, for example, EUR 500-1000. Check with your bank to find out what it is and how you might change it.
In Germany, there’s also the so-called Geldkarte (cash card). It contains a microchip, comparable to that of a SIM card, which can be charged at your bank’s ATMs with up to EUR 200. When you purchase small items, you can access that money without having to enter your pin code or sign a receipt. Payment by cash card (Geldkarte) is not all that widespread, though. It can, however, come in handy when using automated vending machines. Most customers make use of their Geldkarte to buy snacks, tickets for public transport in Germany, or cigarettes.