German credit cards are dumb and useless

So I get a credit card (MasterCard) here thinking that it will help with monthly cash flow so I can pay for big purchases over a month or so.

Not really. Instead, the CC company automatically withdraws the entire CC balance at the beginning of the next month. I never even received a statement saying how much was being withdrawn and on what day.

So it really isn't a credit card. It is just a delayed debit (EC) card. So there is really no point of having a €10.000 limit, for example, unless you have sufficient funds in your account already for them to withdraw your balance (assuming it is that high).

Anyone else have this experience?

Yep, American Express do the same. Its just handy to have to buy things over the internet and ordering plane tickets...

there are some cards that allow part payment, Barclaycard for example.

Yep, agree totally with your assessment. I was shocked when all of my business expenses for the month (nearly 4000€) was automatically debited from my personal bank account before the expense reimbursement was processed by my company, leaving me negative for the month. What a shit process! I've just gotten used to having an overdrawn account due to travel. Fucking screwy!

we have company credit cards which do not withdraw untill two months after billing. this stops people getting wacked before the expenses have gone through. maybe your company should check that out?

Yep, it's totally useless and only good when you need to buy something over the internet or plane tickets.
That's why many Germans don't use them(what's the point) and so many Americans declare bankruptcy every year.

Typically, you state in your CC application whether you want the entire amount transferred from your checking account every month, or whether you prefer to get billed for the minimum due and pay whatever you want. If you are not happy with the current procedure call them and it should be no problem to change it.

CCs in Germany work the same way they do elsewhere.

Oli, many credit cards in Germany do not give you this option, though some do, like Barclaycard as already mentioned.

Statistically, so many Americans claim bankruptcy every year because of medical bills, but that is a whole other thread.

If you claim bankruptcy because you ("you" in general, not you kitkat) overcharged your credit cards and are looking for a way to get out of paying them, then you are a moron and should be jailed for fraud. But that is another thread too.

I guess my point is that I think I should have at least gotten a statement and a heads up that they were automatically withdrawing the money. It wasn't a problem, but it could be for others caught unaware.

@gideon: it is not a company CC, but I do have others from the US that have no balance, but I don't like using them because of the extra currency charges.

@oli2000: totally untrue, that they are no different than US cc's. When I applied, I was at the bank (HVB). They asked me what limit I wanted, I told them and the card showed up in the mail 2 days later. They do not automatically withdraw a minimum amount, which US CC companies require to be paid each month (e.g., $15), they withdraw the entire balance.

As stated, they do so b/c you obviously told them to in your CC application. Call them, have it changed, end of problem.

That's the thing. I didn't fill out an application. I met with my Ansprechspartnerin and she simply asked what limit I wanted and whether I wanted Gold, Platinum, etc. I didn't fill out any forms or even sign anything.

Good point though. I do plan on calling her about another matter and will ask her about that.

I don't plan on using it other than the random flight, car rental, hotel, etc. but I wanted it to start building a credit history in Germany.

i suspect that they automatically assume that you will pay the whole lot off at the end of the month (56 days or whatever). i guess it's one of those situations that i've encountered a few times over here where, 'if you don't ask the specific question, we won't offer the solution', even if it exists. maybe they're not as conniving as british and US CC companies who love people who just pay off the minimum balance as they can rake in the interest. i have worked for barclaycard and they are fiendish bastards!

A lot of the cards here are setup to clear off every month for the first few months. Once you have a credit history, then they'll let you borrow a bit more and clear off a minimum balance.

Heh mine pays the balance off daily, effectivly making it a second card for my normal account, probably just as well really.

The main disadvantage for me is that I liked the idea of having a lowish limit on my credit card so theives can only rip me off so much.. Now that is basically using my normal account they can steal ALL my money, which has the potential for sucking.

I remember going in asking to have it the normal way, and they kind of laughed, but did set up an overdraft on my normal account, hesitantly, and said there now you can be in credit if you really want..

The visa card you get with Citibank over here allows you to specify the amount you pay back automatically (think the minimum is 5% or 10% of the balance).
Maybe you should have shopped around a little and asked questions of your bank before you signed up?

Hey, this thread is about German credit cards being dumb and useless, not me being dumb and useless.

I am cool with it and will get around to changing it. I was just surprised that I wasn't told (maybe they assumed I knew) and I didn't receive a statement saying how much and when.

Because, I didn't fill out forms or sign anything, there isn't a paper I can go read again and go "Oh, that is what that means".

Thanks for all the input!

I have a MasterCard with Postbank, and I specified for them to only pull 20% every month of the credit balance - works great. I applied for the credit card online, and the payback percentage was a prominent section of the application.

maybe we could ask the mods to change the title of the thread, then?

By the way Charge Card/Credit cards with a monthly payment are becoming (slowly) more common.

Barclay & Citibank offer them - you just have to specify that you want them to have the option for a monthly payment.

AMEX Corp card, can allow you up to 60 days of no payment (depending on when you buy).

Hope this helps!

Chris
PS. I agree with @Topsy - once you get used to the "taking it out of your account every month" idea it works well...just a bit of a shock after the US/Canada.

Dont know where you get your basis for this statement..

My card seems to be quite inteligent... I give it to the Cashier, they swipe it in a machine.The money comes out of my Bank account... Quite clever... Not Dumb!

If you want to borrow money, go to your bank and ask them...

I like charge cards. Stops me spending more than I actually have.

I agree, BR - I have an Amex card that books the whole lot out each month, and I have Visa where I pay a %age, but I nearly always use the Amex. Stops me building up a debt.
But it's useful to have the Visa card there in reserve in case of cash flow issues on the current account.

@Grinner: missing the point

Err... No, You missed the point when you filled out a contract that you didnt/couldnt read and undersand!

@grinner (aka, Mr. Sassypants): please re-read above posts. I didn't fill out a contract (i.e., there was nothing to read and/or understand).

well, anyway, Anwalt - you can just go and get your card changed, or get a second one, and you'll be sorted

Yep, that's the plan. Like I said no big deal, now I know.

What calendar are you on - where I come from, there's only 30 or 31 days in a month ( and a cc month is usually shorter than that!).

You must have signed a contract, even if you didn't fill it out (or read it) yourself. All banks require a signed contract to provide a card, be it credit or charge.

Most banks only offer charge cards (Germans have a thing about running credit), especially to new customers who have not developed a credit record/rating with them. The independants (Barclaycard, Royal Bank of Scotland, etc.) offer a credit based card as an option (options include pay the entire balance at the end of the month, pay off a minimum amount, pay off a fixed amount, etc.,). If you are new in Germany you might not even get a credit card, as you may fail the credit rating system, or at least, at the beginning it will be a low limit.

Note that the your entire credit limit an any credit card is entered on your Schufa record, so may count against other applications for credit, especially if you are new here. A charge card, however, no matter how high the limit is not not normally counted for Schufa records.

I have an RBS card with a limit of €60,000. I agree to pay a standard €500 per month irrespective of the balance. When in credit the interest rate is actually better than my bank offers on a standard savings account, and when in debt the annual effective rate is around 12% so still not bad for a "loan". my balance wavers between around +€1500 and -€6000 over a year - every now and then, when funds are available I move money into the account to either (part) pay-off debt, or add some to my savings. It's pretty flexible, and nothing to do with my bank, which I also like, as they have a nasty habit of monitoring spending habits, which I don't like at all.

YL6

This is an English "thing" and also a bit of a marketing ploy, whereby any purchases on a credit card are not charged interest if paid off in full within 25 days of receiving the statement. This means if you buy something on the first day of the (statement) month, you have up to 31 days until you receive the statement, and 25 days after that to pay off the charge, so 56 days of "interest free" credit...

YL6

60K!

And anyway, you are getting "credit", (although I guess you probably pay interest on it) for the 30 days (or 56, no idea) up until they book the amount from your account. Ok, you COULD get credit - you would get the most credit if you bought whatever it was on the first day of the billing cycle.

Is having a card with 60000€ credit limit as bad as it is in the States - from a credit perspective? Like if you want to get a loan, banks look at how much debt you have as well as how much credit you have. Even if you have a 0 balance on your credit card with a $50K spending limit, it means that, potentially, you could get 50K into debt with one purchase, so the banks frown on it.

What is the case here?

You CAN get credit cards that allow you credit beyond the end of the month, IF you want it and IF you fulfill the criteria. As mentioned above.

The level of personal debt in Britain and America is so high is partly due to easy credit and the pushing of that credit by the banks cos it is the most easy to get (the card is in your wallet) and the most lucrative for the banks.

If yo want to make make a major purchase and don't want to save up for it (remember that concept?) than get a bank loan, MUCH cheaper.

Crap thread title cos it is patently untrue.

Edit: KitKat64. My credit limit with the independent German bank issuing my credit card is slightly less than my monthly net salary.
I could get it raised if I wanted to.

I had the same experience as Anwalt. I emailed my bank asking about the possibility of getting a credit card. The next day a woman from the bank rang me back and asked me if I wanted a Mastercard or a Visa. I said Mastercard. Within a week the card had arrived by post, and a few days later the PIN had arrived as well.
I never signed any contract or anything to get the card. I received some blurb with the terms and conditions when I got the card, but I didn't have to return a signed copy or anything.
And yeah, they automatically take the money out of my Girokonto to pay off the credit card. I think they deduct it at the middle of the next month.

As my own posting indicated the Schufa (credit) rating shows the full extent of your credit line, if the bank wish to add it. As a longtime customer of RBS (previously Banco Santander and prior to that Bank Americard) I have an agreement with them that they have only entered the fact I have their credit card on the Schufa - my creditline is not shown.

YL6

just out of interest, what does one use 60K of credit for?

this may be because the credit card is bundled in the package for the Girokonto. The paperwork for which is already signed. Some banks include a credit card some don't.

Maybe you have a bank account which includes a credit card as part of the account service, so signed up for the card with the bank account, but only received it later (following their call to ask you what you wanted)?

I have one of these too. My own current (Giro) account includes 4 charge (not credit) cards with the service, 2 each of Master and Visa. I pay a fixed monthly charge to run the account which includes these cards, unlimited transactions per month, online banking, some dubious insurance and a fixed line of credit

YL6

Excessive alcohol consumption and particularly wild women, the like of which I could never find in Yorkshire.

I've got a Deutsche Bank Gold Visa and I haven't signed anything..they just sent it to me...along with the terms/conditions.

I like the fact that my entire CC balance is cleared each month...no debt.

On a par with the answer to "what do you spend your money on?"

"Fast women and slow horses"

OG and YL6
Maybe the account did include these services.
But as far as I remember when I opened the account I was told I would have to apply for the credit card later - I did ask about it. I was told I could only apply for the EC Karte at the time of opening. I guess they were waiting to see my creditworthiness or spending paterns before issuing a credit card.
It was a year later, when I applied for the credit card. By that stage my employer had lodged enough pay cheques with them.

@canuck

How much do you pay for the DB CC if I may ask? Do you pay monthly or yearly? I also have an account with the DB and am thinking about getting a CC..

Why not just save the money until you can really afford it? I don't buy this monthly cash flow thing. I come from the US as well and do have CCs which I use exclusively for my business travel which always got paid full by the end of the month. I like the visa debit card which is almost the same like EC card here because it debits the fund directly from the bank account.

Not sure what this thread is all about, you can just get a standard Barclay card (Visa Mastercard) which you have the choice of paying it all off at the end of the month or you can pay smaller amounts. You dont have to get them from the bank you actually bank with and I dont recall having to beg them for a sensible limit

just looked up the website
http://www.barclaycard.de/index.php3?page=A1

If you are new to any country, and especially Germany you are unlikely to get any form of debit, credit or charge card unless you can prove to the issuing authority that you are credit-worthy. Most German banks will hand out most cards fairly quickly if you are in employment with a secure monthly income paid into their bank each month. They may want to see a formal letter of expected salary from your company before they do this. The independants, such as Barclaycard or RBS will need more - most usually a positive credit (Schufa) record before they will issue any card. Barclay actually check with 3 agencies - Schufa, Creditrefrom Experian and InfoScore Consumer Data. Having no record with these agencies is often as bad as, if not worse than having a bad record. This can take months, even years to build up, unless your bank is prepared to provide a reference or guarantee (which is not really in their best interest as they are losing your business), or possibly you get some form of third party guarantee, e.g. from your employer...

YL6

From what I know its a German thing. German CC companies will take back their money by dipping into your account when the next month starts...that's the way it works.

@YL6
it doesnt matter where you are, if you are unemployed there not a lot of banks that will give you credit, as to building a credit history I think the only thing I was asked about was if I already have a Visa card, but I may be wrong about that it was a long time ago