Credit Card with Travel Points as an American In Germany

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Hello!

 

I am moving to Germany this summer and I figured it would be a smart idea to apply for a credit card that will enable me to collect airline miles since I intend to visit my family back in the US a few times a year (if possible). It should also help with the initial expenses that I'll have settling in. I'm 23 and the only credit card I use frequently is my Discover card.

 

The question is, however, should this be an American credit card or a German one? Could I even get a German one without having lived there and building credit for a few years? Does it make sense to sign up for a US credit card, just to buy my first one-way ticket and then use it only in Germany? If so, what cards are good for this? It seems like having to send money to my US bank account to pay it off might make any benefit useless. I also heard airline miles credit cards in Germany aren't really a thing like they are in the US.

 

Any advice here would be really helpful.

 

Thanks!

Ian

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It can be quite difficult to get things like credit cards without a credit history here. Usually when you first move here and manage to get a bank account they prefer to give you a card to withdraw cash from their own machines only. A more universal 'EC' debit card will come a little later and as for credit cards ...

OK, so there are exceptions and I'm sure others will share various experiences, but in the meantime have a search around TT as there are many discussions about German banking.

 

As for your air miles I can share a similar type of experience from when I first came here 16 years ago:

I moved here from the UK and kept a UK bank account at the time and also my UK-issued Diners Club card. I continued collecting points and when the day came that I ordered some nice goodies with my points they respectfully informed me that due to the unreliability of foreign postal systems they can't send any 'goodies' from their points system outside the UK.

 

I quickly reminded them that after a couple of years here in Germany our supposedly 'unreliable' postage system had never lost a single bill or statement from Diners Club.

It worked.

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Note also that the German concept of "credit card" can be very different from  that in other countries. Many German credit cards have to be paid off in full at the end of every month via a direct transfer from your bank account. You can't just make a minimum payment and take the balance on into the next month.
 

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...Plus you can't pay by credit card in many stores. Furniture stores won't accept credit cards, for example. So you'll struggle to collect large amounts of points.

 

...Plus as well, the airline points schemes have got less and less generous over the years to the point of being almost useless. Lufthansa M&M for example charge almost as much in fees when redeeming points as a cash fare with a different airline. And the credit cards also give ever fewer points per euro spent. So you need to do your homework very carefully.

 

Lots of existing threads on the forum will help you in your research, but all in all I think your expectations greatly exceed the reality, to be honest.

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To address two points in previous posts

 

...Plus you can't pay by credit card in many stores. Furniture stores won't accept credit cards, for example. So you'll struggle to collect large amounts of points.

 

 

hm, i use my credit card almost everywhere these days in Germany.  Well, but i don't buy much furniture aside from online and Ikea :lol:  But i use it for all travel, all groceries, clothing stores, gifts....and I have wracked up quite a few thousands in points as a result

...Plus as well, the airline points schemes have got less and less generous over the years to the point of being almost useless. Lufthansa M&M for example charge almost as much in fees when redeeming points as a cash fare with a different airline. And the credit cards also give ever fewer points per euro spent. So you need to do your homework very carefully.

 

This is true, i recommend looking at the forum FlyerTalk for this reason - they can help guide you on the right card. 

 

 

I moved here from the UK and kept a UK bank account at the time and also my UK-issued Diners Club card. I continued collecting points and when the day came that I ordered some nice goodies with my points they respectfully informed me that due to the unreliability of foreign postal systems they can't send any 'goodies' from their points system outside the UK.

 

Also true - you sometimes can have a hard time getting your rewards provider in the US to send you your reward.  After doing tonnes of comparisons of points to dollar value, I have came to the conclusion that its worthless to use points for travel, and purchases can be iffy.  I tend to scan my rewards provider (Aeroplan) website frequently to look for deals, sometimes they will have specials.  What i typically end up with is 200 or 500$ gift cards that i can use back home (i.e. for gas or food) and/or prepaid credit cards.  I get them shipped to my brothers and they are there when i arrive.  

 

As for cards here in Germany, it really depends on what your needs are. You can also look beyond point collecting and thinking about the benefits of certain cards and what they gave give you (sometimes more than a point based system) I think the Hilton HHonors Visa Card offered here in Germany is a hell of a deal because you get automatic gold hilton status.  If you stay in a lot of hotels like i do, something like that has a lot of benefits.  Or if you value having access to airport lounges (I do because i can take my kids into them for a little relaxation and hot buffet before a 10 hour flight), there are some good American express card options in the US that give you access.  It really depends on what you think you will be using your rewards for.  Like i said, check out the flyer talk forum to get more suggestions as I can never keep up with the latest and greatest schemes, and searches here will only have outdated suggestions even a month later - the FT guys know what they are doing.

 

 

 

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Also, speaking of credit cards, four large discount grocery chains announced this weekend that they would start accepting MasterCard and Visa: Kaufland and Lidl (from July 1) as well as Aldi Nord and Aldi Süd (gradual rollout between July 1 and September 1)...

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...Plus as well, the airline points schemes have got less and less generous over the years to the point of being almost useless. Lufthansa M&M for example charge almost as much in fees when redeeming points as a cash fare with a different airline. And the credit cards also give ever fewer points per euro spent. So you need to do your homework very carefully.

 

Depends what you do with the points. M&M is very cost-effective for (i) intercontinental business class fares (ii) short-notice European flights whether in business or economy. It is stupid, and as you said often more expensive than paying cash, to use miles for a cheap, economy-class flight booked long in advance.

 

When there's a promotion on 55,000 points (i.e. €55,000 spend on a credit card) will get you a business class flight to the USA. Granted, at age 23 most people would take a loooong time to spend €55k on credit card. But for frequent fliers and big spenders the LH card is the dog's gonads.

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Hi IanMKahn,

 

We have also just moved to Germany a few months ago, we are USA/UK and opened our accounts at Sparkasse in our neighborhood. When we opened the Giro konto and got all the insurance policies (after reading horror stories about not having 3rd party liability insurance ... you might want to get that too!), we asked about credit cards. We travel and buy a lot online, so we wanted something a little more widely accepted than an EC card.

 

We ended up with a Miles and More account piggybacked from a gold card, which was Mastercard, NOT Maestro! You accumulate 1 mile for every Euro spent, just like America, but not quite as good... I doubt they do double points or sign up bonuses, etc. But I believe you can get things like that directly through Lufthansa if you are a M&M member. 

 

We do the very American thing of charging everything and paying off the entire balance every month to get the miles. There is an annual fee for this of about 60 Euro, but for us it's OK since we really use it a lot. Of course, a German might horrified by how we manage this, but it's one in the same if you pay it off each month and so far we have been very happy with everything from our local Sparkasse. 

 

Hope this helps. 

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If your current credit card in the U.S. gives you cash back or airline miles and you plan on keeping an account over there, just bring it and use it here. Any place that accepts credit cards will accept it. If you accrue miles, you can still used them by booking through the appropriate airlines. They will put you on their partner airlines over here.

 

And no, the airline mileage has become difficult to redeem and it takes a lot more miles. Still, it is a big savings when you use your card to buy things you would otherwise purchase anyway. So long as you pay it off each month, of course.

 

I get much "cheaper" flights with my United miles than Himself gets with his LU miles but they are interchangeable.

 

Also, I had problems ordering gifts and such online in the U.S. with my German credit cards. It is better to have a U.S. card if you intend on doing the same.

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On 22.6.2015, 10:11:01, Small Town Boy said:

...Plus as well, the airline points schemes have got less and less generous over the years to the point of being almost useless. Lufthansa M&M for example charge almost as much in fees when redeeming points as a cash fare with a different airline. And the credit cards also give ever fewer points per euro spent. So you need to do your homework very carefully.

 

Hi There! It's now over 2 years later and I've got my Commerzbank German credit card and EC card. Still slightly shocked that you can't carry a balance here. Basically, the only benefit of my credit card is that it's mastercard so it's accepted everywhere credit cards are (which is good for traveling), but the full balance gets pulled out of my girokonto every month. 

 

I didn't want to start a new thread to ask this question so I hope this gets seen! In the 2 years that I've lived in Munich I've traveled back to the states at least twice a year and I've become loyal to Lufthansa because there's some great deals on the MUC<>EWR route, they're reliable, and... if not the most important part - there's free booze on board.

 

So now I want to know if getting a miles card would benifit me at all. I gathered from your previous answers that the benefits of these credit cards aren't really big enough to be useful. It could be a US card (I still have my address there) or a German card. It could be a bank card like Discover miles or it could be a Lufthansa partnered card. For someone who travels to and from New York and Munich a few times a year plus a few extended weekend flights in Europe, do you have any recommendations on cards that I could benefit from?

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44 minutes ago, IanMKahn said:

but the full balance gets pulled out of my girokonto every month. 

 

So you don't have to pay any interest. Have you organized your girokonto so that you can overdraw to a certain amount? That way you get to pay some interest, I believe.

 

Does LU have a Miles and More credit card? I know United has one where you earn miles on every purchase. United is Star Alliance so it might work. I think there is a fee for those cards, though. I accrue all my points on United and can use them with both airlines and more. Not willing to pay for a credit card, though. I never have. 

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57 minutes ago, IanMKahn said:

 

..So now I want to know if getting a miles card would benifit me at all. I gathered from your previous answers that the benefits of these credit cards aren't really big enough to be useful. It could be a US card (I still have my address there) or a German card. It could be a bank card like Discover miles or it could be a Lufthansa partnered card. For someone who travels to and from New York and Munich a few times a year plus a few extended weekend flights in Europe, do you have any recommendations on cards that I could benefit from?

 

 

Credit card payback schemes are not as good as they used to be.  Since the EU forced credit card companies to reduce fees then they have cut back on perks.

 

But if you take out a LH Miles and More credit card then you earn 1 point per 2 euros spent on the card.  

 

To redeem points a return economy flight from MUC <-> EWR would cost 60,000 points (economy).  That means that you will have to spend 120,000 Euros to earn this many points.  (actually more, because the points around rounded down.  e.g.  3.99 Euros = 1 point!)

On top of that you will have to pay taxes and fees.  I don't know how much they are for this route, but I would guess between 200 - 300 Euros for economy, and 500 - 600 euros for business class)

And you will have to pay for the credit card a yearly fee.  How much depends on exactly which card you get.

 

So if you do it just for this then it is not worth it.

However, if you are spending the money anyway then over time this can add up so that you at least get something back.  

 

If you are seriously interested then there is currently a promotion when you can get bonus points for joining if you are recommended by a member (me!), so drop me a PM and let me know.

 

 

Other credit cards have different options.  Check24 has a good overview of them;  https://www.check24.de/kreditkarte/

 

 

 

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2 minutes ago, dj_jay_smith said:

But if you take out a LH Miles and More credit card then you earn 1 point per 2 euros spent on the card.  

The US version of the Miles and More card offers 2 points on every dollar spent with Lufthansa and 1 point for every dollar spend anywhere else. This sounds like a much better deal than the German Miles and More card. Also there's more perks included. The only problem is I think redeeming points has to be done on journeys that start in the US.

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I have a Delta Gold card tied to my fathers address back in the US.  You can get something like 50k miles for signing up which is almost a free flight in itself (off-season flight anyway).  The platinum card has even better rewards, but the annual fee is higher and doesn't make sense for me.  

 

In general, I think Germans are too responsible with their money and therefore do not pay the interest and late fees that Americans tend to run up.  German cards almost universally have annual fees and not as generous rewards.  

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4 minutes ago, IanMKahn said:

The US version of the Miles and More card offers 2 points on every dollar spent with Lufthansa and 1 point for every dollar spend anywhere else. This sounds like a much better deal than the German Miles and More card. Also there's more perks included. The only problem is I think redeeming points has to be done on journeys that start in the US.

 

Legally you have to be a US resident.  But you might get away with this.

But then you will probably have to pay currency exchange fees for every purchase you make in Euros.  

 

I'm not sure that they have a restriction of where you start your award flight from (and I cannot find any such restriction in the T&C), but if most of your transactions are in Europe in Euros and you take award flights starting in Europe then they might get suspicious on your US residency and worst case suspend your account and you would forfeit the points.

But I'm not sure that this is a high probability.

 

Just remember that technically the credit card is from a different company than Lufthansa, so they might apply different rules if they think you are cheating the system

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5 minutes ago, dj_jay_smith said:

they might get suspicious on your US residency and worst case suspend your account and you would forfeit the points.

I use all my US cards in Europe and pay them back in dollars (which I unfortunately have to transfer). I could always use the US site to buy tickets in dollars as well. I'm not "officially" a resident, but I still have an address (my parents house) where my credit card bills and student loan are registered. If I'm paying and I'm American then I don't see why it would be an issue.

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1 hour ago, IanMKahn said:

I use all my US cards in Europe and pay them back in dollars (which I unfortunately have to transfer). 

 

Isn't this more expensive? If you're earning in euros, spend in the Eurozone, but pay with an American card you end up with two foreign exchange transactions on one purchase.

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1 hour ago, fraufruit said:

I've never had that sort of issue with my American cards.

 

By that I meant using my Ami cards for dollar purchases with airlines, whatever. I only use my Euro cards over here unless I want to splash out for something for myself or for Himself's bday, etc.

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1 hour ago, engelchen said:

 

Isn't this more expensive? If you're earning in euros, spend in the Eurozone, but pay with an American card you end up with two foreign exchange transactions on one purchase.

Personally, I still have a US bank account from which I pay my US credit card bills.  I also fly Delta.  So I don't worry too much about exchange rates and transaction fees, 

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