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Why Germans pay cash for almost everything

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Re: Why Germans pay cash for almost everything

#261

Post by _Codemonkeyism »

codegeek wrote: post #94
_Codemonkeyism wrote: post #81

Earlier quoted context omitted.

As a German a.) I mostly pay cash because it's faster b.) some shops that can afford it only have cash payments to save on CC costs Not because of inflation or because something happend 100y ago.

As an american, I find it strange that cash is faster. Most people who pay cash need to wait to get the change back unless they know the total beforehand and happen to have exact change. In the US, credit card machines are very fast even the chip enabled ones. Cash workflow: - Cashier tells you the total amount - You look in your wallet/purse - You spend time counting exact change if you do have it - If not, you take…

Cash workflow:

- Cashier tells you the total amount

- I get a 10 EUR note from my trouser pocket

- Cashier gives back money

- I put money in trouser pocket

- Done

- Home: I put all spare money in a large glass jar

Credit card workflow:

- Cashier tells you the total amount

- You look in your wallet/purse

- You swipe card/insert in chip reader

- You insert PIN number

- You shield your PIN entrie from the people next to you

- You tell people too close to back off

- Chip reader did not work because of humidity

- You insert PIN again

- You tolerate the angry stares from people behind you who think you're either stupid or broke

- You wait 5 sec for transaction to fish

- You put card back in wallet

- You put wallet back in trouser pocket

- Done

Re: Why Germans pay cash for almost everything

#262

Post by martinald »

jurgenwerk wrote: post #53

I thought it was the other way around - that the reason German people pay cash is simply because shops and bars refuse to support credit cards. Whenever I visit Berlin I'm so frustrated because I have to plan my spending ahead and make sure I have enough cash in my pocket before I go buy anything.

Agree, such a pain. Especially in restaurants if you take a large group out and want to pick the bill up. It has got better but I have been totally caught out with this on one of my first visits to Berlin with a fairly pricey group dinner and I physically cannot take more than €250 out of the ATM a day without taking cash out on CC which involves horrendous cash advance fees.

I also don't buy this cc fee argument. It's regulated (and low) in the EU, perhaps 1-2%. This must be lower than the cost of storing cash, counting cash, paying it in to the bank, transporting it, getting fraudulent notes, people giving wrong change, etc etc.

The other annoying thing is DB machines not taking visa/mastercard and no notes over €10 (though this may have changed recently), which is all you get out of an ATM when you land at the airport. Such a hassle.

I hope Berlin can fix this and the BER airport situation one day.

Re: Why Germans pay cash for almost everything

#263

Post by wott »

ijafri wrote: post #16

I have experimented with it too, and you may as well, leave your credit cards at home, and only use 'Cash' ... you will think twice before paying for $100 consumer item ... whereas using Credit Card, you barely had noticed the price tag .... so bottom line is, Yes, paying through Cash can 'significantly' cut your expenses on 'extravagant spendings'.

That's even more true with small spendings: with cash, you easily see the amount stocked in your wallet decrease item after item, shop after shop, drink after drink; you also need to "refill" at the cash dispenser when it gets empty so that reminds you that you have already spent the XX or XXX € you had taken 2 days ago; you also may not be bothered to refill and opt for a lower priced item, or a lesser quantity of items, or do without the item.

If you start paying small amounts with a card, it is too easy and also you don't keep track of your spending rate, you don't "feel" it, so you end up spending more.

(After all, that's the point of it, shopkeepers wouldn't bother losing time and money to offer card payment if they got no benefit from it.)

Re: Why Germans pay cash for almost everything

#264

Post by golergka »

pascalxus wrote: post #239

The question isn't why germans pay cash. the question is, why would you do it any other way?? I'll tell you why. In other countries we allow credit card companies to tax the masses. By creating regulations that prevent merchants from charging a different price for cash vs credit, you effectively force everyone to pay 2.5% extra for every purchase. That 2.5% goes straight to the credit card companies, even if you pay…

> By creating regulations that prevent merchants from charging a different price for cash vs credit, you effectively force everyone to pay 2.5% extra for every purchase.

Force?

Merchants are free to sell things for cash only. But they won't - because consumers want to pay in credit cards, and a shop that only accepts cash will lose customers.

Re: Why Germans pay cash for almost everything

#265

Post by _Codemonkeyism »

pmoriarty wrote: post #238
codegeek wrote: post #94

Earlier quoted context omitted.

As an american, I find it strange that cash is faster. Most people who pay cash need to wait to get the change back unless they know the total beforehand and happen to have exact change. In the US, credit card machines are very fast even the chip enabled ones. Cash workflow: - Cashier tells you the total amount - You look in your wallet/purse - You spend time counting exact change if you do have it - If not, you take…

Not only that, but you also have to either carry your small coins around so you can use them up or you have to collect them and then redeem them all for bills or deposit them. This is a royal pain. I have so much change lying around the house that I haven't bothered to count and redeem. On the other hand, if you use credit cards, you would ideally be keeping receipts and then reconciling them to the statements you ge…

Every evening I put all spare change from my trouser pockets into a large glass jar next to the door. Once a year I reedem the money and have a really nice dinner.

Re: Why Germans pay cash for almost everything

#266

Post by martinald »

ant6n wrote: post #104
jurgenwerk wrote: post #53

I thought it was the other way around - that the reason German people pay cash is simply because shops and bars refuse to support credit cards. Whenever I visit Berlin I'm so frustrated because I have to plan my spending ahead and make sure I have enough cash in my pocket before I go buy anything.

Just keep a couple hundred in your pocket, like everybody else and their grandma.

What if your wallet gets stolen or you misplace it?

Re: Why Germans pay cash for almost everything

#267

Post by DougWebb »

egeozcan wrote: post #191
DougWebb wrote: post #158

Earlier quoted context omitted.

I've never heard of anything like the dividing of payments you're describing. Are you saying that the CC company doesn't pay the merchant all at once, by default? That seems really shady. They should either have enough capital to pay the merchant in-full right away, or they should pay the merchant the interest they're collecting from the buyer if they buyer isn't paying the CC bill in full each month.

The bank pays the full amount immediately, unless they have a special agreement with the seller. You get different treatment according to your CC provider. Here is an example: http://www.gold.com.tr/BankaKampanya.aspx (Turkish). "Peşin fiyatına 3 Ay taksit" means "3 months payments without interest". They usually inflate the price beforehand to account for such payments, so you are disincentivized to use a debit card…

Ah, I see. In the US a common marketing offer for credit cards is that they let you make one charge that will be interest-free for 6 or 12 months. You can pay it off whenever and however you like, but if you don't pay the whole thing before the deadline you'll owe all of the interest for the whole period. They make money off of this two ways:

1) People forget to pay it off before the final date. They're not always clear about when that date is; you know exactly how long it's been since the charge, but you don't know for sure when your payment will be applied. It's best to pay the total off at least a month before the final date, to be sure it's paid during the billing cycle before it is due.

2) If you use the card for anything else, there's fine-print that says that any payments will go towards non-promotional charges first. It can get very difficult to determine if you've paid the promotional charge off or not, and they typically do not assist you in figuring that out.

They also benefit from extending you more credit than you need for the one charge you want to make, especially since you're unlikely to use it in order to avoid trap #2. And they benefit from having an additional customer on the books. I'm sure these benefits make them money somehow too.

Re: Why Germans pay cash for almost everything

#268

Post by _Codemonkeyism »

wongarsu wrote: post #131
codegeek wrote: post #94

Earlier quoted context omitted.

As an american, I find it strange that cash is faster. Most people who pay cash need to wait to get the change back unless they know the total beforehand and happen to have exact change. In the US, credit card machines are very fast even the chip enabled ones. Cash workflow: - Cashier tells you the total amount - You look in your wallet/purse - You spend time counting exact change if you do have it - If not, you take…

In a German supermarket there are two notable differences: People pay with rounded bills most of the time, cashiers are fast at returning change (amounts are usually a single cent below the full euro for each item, so change isn't a big problem). The credit card workflow requires you to sign as well (or alternatively sometimes your pin if it's a debit card). Also, no swiping, only chip readers. So in essence, taking…

New CC cards with chip e.g. Visa/DKB have also PINs without being a debit card.

Re: Why Germans pay cash for almost everything

#269

Post by egeozcan »

herbst wrote: post #227
egeozcan wrote: post #54

Earlier quoted context omitted.

Debit card is pretty equivalent to cash, though. When my friends and family from my hometown (Istanbul) visit me the first time, they are usually quite shocked that most shops here do not accept credit cards at all. In Turkey (a place I call micro-USA), many credit cards automatically divide the payments for some transactions to 3+ months, whereas here in Germany, there's always some bureaucracy involved, even if you…

This sounds like the most fantastic way to get a literal wage slave.

Exactly, I mean, maybe it's not clear from my comment but it was very hard to calculate how much disposable income I'd be left with after the monthly payments. In the statement, you see how many payments left for each transaction but when you buy practically everything like that, one would need dedicated software to figure out his/her financial situation.

Re: Why Germans pay cash for almost everything

#270

Post by Sleeep »

wott wrote: post #225
Sleeep wrote: post #207

Earlier quoted context omitted.

Handling cash is not free either, it also comes with transaction costs.

Nope.

Yep.

https://qz.com/123642/physical-money-costs-americans-more-th...

>larger businesses spend a significant amount of money dealing with cash—collecting it, sorting it and getting it to the bank without it being stolen. US businesses lose $40 billion a year to cash theft and loss, about 1% of total revenues.

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