One thing people will warn you about when moving to Germany is that they are not big fans of credit cards. I thought that this would be a minor/annoying inconvenience as it was when I traveled to Germany on vacation, but what I didn’t realize was how truly annoying this would end up being.
Before I get into details, I should probably provide some background for those who are uninitiated in the lovely process of trying to pay for things in Germany. Credit cards are rarely accepted… hell I went to IKEA and although they have the capability to do so, their official policy is not to accept credit cards. What the Germans vastly prefer are a.) Cash or b.) German debit card a.k.a. EC/Maestro card. People will use cash for small purchases up to and including things like computers.
Unforeseen Annoyance 1: Expense Reports suck even more
For longer trips being able to have a digital record to track expenses, especially for smaller expenses, is nice to double check with. With everything being cash, I now need to be much more diligent with tracking what I’m spending. It also means more cash advances at ATMs which can be annoying/difficult depending on how your card is set up.
Unforeseen Annoyance 2: Getting money from the USA will cost money/take time
Picture this you just moved into your unfurnished apartment in Germany (which is likely the case since the vast majority are unfurnished). You’re looking around at the wires hanging from the ceiling and realize it would be nice to have some light at night. (German apartments often come without lights) You also realize that it would be nice to have a place to hang some clothes and that you would need some clothes storage (German apartments often come without any storage/closets). You decide to go to your store of preference IKEA and they don’t accept credit card, which means you now need a fair amount of cash. Unless you are lucky enough to have a bank in the USA which will allow you to keep using it as an expat with free ATM withdrawls than you will need to:
- Get money from ATM and pay the fee. (3% and may run into daily limit issues)
- Take cash advance on credit card (expensive and can could charge daily interest)
- Wire money to your self and pay (~$45 plus possible transaction fee, plus need a bank)
Unforeseen Annoyance 3: You will need to get a Bank Account
Getting an EC/Maestro card is one of the many reasons you will need a German bank account. If you were naive like me and were hoping you might be able to just pull cash out of your American bank account let me give you a few reasons why this won’t work.
- You want internet? You will need a bank account.
- EC/Maestro Card? You will need a bank account.
- Want to wire money to yourself in Germany? You will need a bank account.
- Personal/Renters Insurance? You will need a bank account.
- I feel like there will be others that get added here but that’s what I got for now :/
Also, I should mention some of the “ideas” I had to get around bank accounts that didn’t pan out.
- What if I open Schwab Bank High Yield Investor Checking Account? They offer 100% free ATM withdrawls worldwide… this seems like an awesome idea right?
- Sort of… If you plan on traveling a lot (Germany or elsewhere) but living in the USA you’re golden. However if you are an expat like myself now living abroad the account is technically not meant for you. What I mean is that you can sign up and use it but I have read of cases where Schwab will stop or at least threaten to stop your account if you are only abroad. Also they do a hard credit check on you when applying so it would be unfortunate to take that hit on your credit and then not have a reliable bank account.
- Note on Bank of America: Bank of America is “partnered” with Deutsche bank which allows you to use their ATMs without a “fee”, which sounds great until you realize they will charge you 3% for withdrawling currency not in USD. #WahWah
- What about HSBC expat banking… well I suppose if you have at least $100,000 in your HSBC investments that will work.
Ok convinced you need to get a bank account? Well that lovely process will be a rant for another day.