Germany’s Cash Culture: “Geld stinkt nicht”

In Germany, Cash is King

North Americans are often frustrated by the lack of credit card acceptance in Germany. Americans and Canadians, so used to paying with plastic, are dismayed to discover that once they stray from the tourist circuit, their AmEx, MasterCard, or Visa credit cards are often useless in German-speaking Europe. It’s another cultural difference, and it’s not a minor one. You need to wrap your head around the fact that cash is king in Germany, Austria, and Switzerland. As the Germans say, “Geld stinkt nicht.” (“There’s nothing wrong with money.” lit., “Money doesn’t stink.”)

Euro banknotes

Euro banknotes range from five to 500 euros. Notice that, unlike US bills, euro banknotes also vary in size. PHOTO: ECB

The Bundesbank, Germany’s central bank, recently estimated that 79 percent of financial transactions in Germany are settled in cash, while in Britain and the USA that figure is under 50 percent. A typical German walks around with the equivalent of about $123 in cash in their wallet, nearly twice as much as Australians, Americans, the French or the Dutch typically carry. There is little talk of a “cashless society” in German-speaking Europe.

Many people have searched for an answer to why Germans (and the Swiss and Austrians) are so much more in love with cash (Bargeld) than most other nationalities. The use of cash for most transactions seems to be deeply ingrained in the German psyche. Children grow up in Germany’s cash culture, and as adults they think nothing of paying a bill of 500 euros or more with paper money. And they can do that with a single banknote, the 500-euro bill that was created as a concession to Germany to ease the pain of giving up the Deutsche Mark (DM). The 500-euro note, worth about $570 today, replaced the popular 1000-DM bill. Switzerland still has its 1000-franc (CHF) banknote, the largest denomination bill in the world, and today worth just a little over 1000 US dollars. We’ll discuss more aspects of these giant banknotes below.

Possible reasons for the German passion for cash vary from the German love of privacy and anonymity to the historic encounters with hyperinflation in the Weimar era, and after World War II. Germans also claim that by using cash, they are better able to keep track of their finances and avoid debt. (The German love of using cash is countered by an intense hate for debt.) Other observers claim cash offers a good way for Germans to avoid taxes with off-the-books cash transactions. Continue reading

From Smoke Detectors to Electric Cars: New and Revised Laws in Germany for 2016

Sometimes it’s surprising how a modern nation like Germany can lag behind in certain areas. A good example from the past is smoking. While the US and many other countries long ago banned smoking in restaurants, the workplace, and other public areas, Germany was slow to do the same. After an initial period of voluntary restrictions by some businesses, Germany began to regulate smoking in public places. (Austria, on the other hand, still has a lot of work to do on public acceptance of smoking bans. Cough! Cough!) While non-smoking areas in Germany were once a rarity, today German anti-smoking laws are similar to those in the US in most cases.


As of 2016, some German states require the installation of smoke detectors (Rauchmelder) in existing homes. PHOTO: Feuerwehr e.V.

Another area where Germany was lagging behind was smoke detectors. As with many things in Germany, this is an area left to each of the 16 Bundesländer (states). There is no nationwide law. After a slow start beginning around 2004/2005, almost all of the German states now require smoke detectors in new houses and apartments. As of 2016, only Berlin and Brandenburg still lack any smoke-detector requirements (Rauchmelderpflicht). Some Länder now also require smoke detectors in older, existing living quarters. Continue reading

Moving to Germany: The Top 10 Things to Consider

Moving anywhere is a challenge. Even a short move across town can be problematic. An international move presents additional complications, but a little preparation will mean fewer hitches. Even if you are fortunate enough to be using the services of a relocation agent, you should be aware of the following ten factors to consider when moving to Germany.

Berlin apartment parking

Having a car in Germany can be a mixed blessing. Here: apartment parking in Berlin-Friedrichshain. PHOTO: Hyde Flippo

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1. Get Oriented
By “get oriented” I mean get to know the culture, the language, and the place where you’ll be living. This may seem obvious, but I am constantly amazed by how many new expats fail to do this. You’re moving to a new country with a culture and a language very different from what you’re used to. Don’t arrive in German-speaking Europe without at least some basic preparation. This is what our German Way site is all about! You’ll find all sorts of help here, and here are a few tips on what you need to learn: Continue reading

American Expats, the IRS, FATCA and Other F-words

Besides “IRS,” Americans can now add another item to their list of ominous acronyms: FATCA. Like most things related to income taxes, the FATCA issue has a lot of people in a dither. As if US tax law wasn’t already complicated enough, along comes FATCA to gum up the works even more, especially for US citizens living overseas and earning income from a non-US source.

All US citizens or resident aliens living abroad are obligated to pay income taxes to the US Treasury, even if they haven’t lived in the United States for years, have no intention of returning, and even if their income comes solely from foreign sources. The United States of America is the only modern, industrialized nation that taxes the worldwide income of its estimated six million citizens who live abroad, even if their income is generated in a foreign country and they never return to their homeland.[1] Continue reading

Put Away Your Checkbook

Of all the things one can miss about a country after departure, the banking system probably shouldn’t be at the top of the list. For this ex-expat, however, it is actually one of the things I miss about Germany. The banking system there has arrived in the digital age, and North America is left in the dust.

For starters: put away the checkbook. Nobody in Germany has written a check in decades. When I arrived in 2000, checks were already obsolete. I was confused at the time: how do you pay individual people when you don’t have cash? The answer: bank transfers. In those dark ages of the internet, you paid others by filling out a paper Überweisung (transfer) slip, and giving it to your bank (possible via drop-box at most branches). Continue reading

American small talk vs German no talk

Germans don’t do small talk. (Well, sometimes they do – but they rarely admit it.) Most German-speakers will tell you that their language is too serious and precise to be wasted on small talk or chitchat, especially with strangers. Anyone who has lived in Berlin for any length of time knows that Berliners in particular aren’t prone to idle chatter – even if they know you fairly well.

So I was amused to read an article on German stereotypes and “Chatiness” in the latest issue of The Atlantic Times (Dec. 2009). Jabeen Bhatti writes of her astonishment when – in a single day in Berlin – she experienced several strangers chatting with her, something “as rare as seeing a white Rhino.”

In the US, such banter among perfect strangers is nothing unusual. Continue reading

German banking (and credit cards) for beginners

When I was traveling in France recently, I rediscovered some of the differences among the European countries in the area of banking and credit card use. Credit cards are more common in France than in Germany (but not as common as in the US), and the French still write personal checks, just like in the US, but very unlike in Germany.

EC card

A German EC/Maestro bank card is like an American bank debit card.
PHOTO: Volksbank Raiffeisenbank Würzburg

Expats in Germany already know that Germans just don’t use checks. A check drawn on a US bank account is virtually useless in Germany. It takes a lot of effort, a German bank account, and some financial savy to cash or even just deposit a US check at a German bank. The German equivalent of a personal check is called eine Geldüberweisung (“money transfer”), but these days you rarely see the paper variety. Usually, you handle an Überweisung by computer, transferring funds from your German bank account to someone else’s account. Continue reading