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 paying in cash more often. “Cash is king” is an age-old saying. For much of Germany, however, the phrase is still up to date. 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 pays 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).
This may be surprising to some. After all, Germany is Europe’s leading economy and famous for technological know-how. But, even while some of its neighbors in Europe and elsewhere are quickly swapping physical money for new pay technologies, many Germans prefer their euro bills. Cash is quick and easy to use, they argue.
It provides a clear picture of personal spending, keeps transactions more private, and is widely accepted in the country. Germany has one of the highest rates of cash used in the European Union.
“The most important reasons for the intimate relationship of Germans to cash are their needs for the protection of personal data, security and confidentiality of payments and for simple, universal usability,” says Doris Neuberger, head of the money and credit department at Germany’s University of Rostock.
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 vari
ous 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 the cost of living in Germany).
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.
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 cash pools 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 cards, whereas tiny B&Bs may not take any credit cards at all.
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 s
eparate bills at the supermarket. A daily withdrawal limit may be imposed as well, for example, EUR 500-1000.
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