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23. Money Talk

Money in Germany mostly means real money, good old cash. Cash is used more commonly than any other payment method in Germany. Credit cards are accepted by many places, for example car rental agencies, airlines, almost all hotels, many gasoline stations, restaurants and bigger stores in bigger towns, but often frowned upon for small purchases. Many, mainly smaller, businesses won't accept credit cards because of their billing costs, so you better ask before you have to pawn your firstborn because you don't have cash on you. Businesses that accept credit cards usually accept all the major ones like Visa, Mastercard/Eurocard and American Express.

Eurocheque cards (EC cards) are accepted more commonly than credit cards because of their lower transaction costs. You usually them from almost any European bank if you have an account there and fulfill certain conditions, similar to those for obtaining a credit card. Payment is guaranteed up to 400,- DM or the equivalent value in a different currency, but frequently higher sums are accepted when you present some form of identification. You can also get cash from ATMs with an EC card for between 0 and 4 DM per transaction.

23.1 Sending Money

Getting money across international borders can be tricky. The following hints are mostly based on experiences of posters on s.c.g who needed to send money to mail order places in Germany / to transfer their funds when working abroad / for their own or their relatives' traveling needs / etc.

(Says one reader:)

As for financial transactions, let me point out that combining various strategies you've listed really works well. For one thing if you have accounts on both sides of the Atlantic (or elsewhere for that matter) it's good to have checks of those accounts with you wherever you go. Here, for instance, I pay my bills in the US simply by sending checks from an American checking account. That way cash flow stays within the respective country and doesn't have to undergo exchange rates or excessive fees. To bring the money across the Atlantic international credit cards work great.

Sending money to Germany

American ATM cards

German ATMs accept nearly anything that's credit card sized and magnetic. Most German ATM's accept cards from one of the major American networks such as Cirrus. Ask your American bank though how many arms and legs they charge for cash withdrawals abroad. The German bank that runs the ATM in question will also want a cut, somewhere between 2 DM and 5 DM, usually.

Transfering from an American account to a German Account

People have been able to transfer money from an American bank to a German (notably with Postbank and Raiffeisenbank.) It's possible to cash a personal check from a U.S. to a German account. The Postbank charges a fee of only 3 DM for one check, Raiffeisenbank takes out 15 DM. No other hidden costs, but, alas, you probably need to have an account with the respective institute for using this service. US checks must be made payable to the bank that cashes them.

Sending a (e.g. American) personal check

is definitely risky business, unless the check is a Eurocheque drawn on another European bank.

Deposit with foreign branches of German banks

If you are lucky enough to find a major German bank's branch in your city you might be able to direct deposit money. One bank that makes that work like a charm is Citibank, an American bank with branches in several states in the US and a fairly tightly knit network of branches in Germany.

International postal money orders

As of May 2000, the Deutsche Post AG does not accept international postal money orders anymore. If you want to complain about this, send email to their customer service.

Travelers checks

Go to a local (e.g.) American Express office and purchase DM travelers checks. You lose a lot when you change your USD traveler checks at German banks. You can get single checks, 20's and above. No service fee, but a few points off the bank exchange rate. Make sure to fill out the Pay to the order of: field for security! Problem: You may not get the exact amount you need (DM 57.89) when paying, say, a mail order bill.

American Express money orders

Are well accepted by German banks. For long term you might consider opening a German bank account and depositing a regular payment with American Express money orders. Then you can pay German bills off of that account.

Ruesch International Financial Services

will issue a draft in DM (and other currencies) at the current rate of exchange, plus a service charge of US$15 per transaction. Their services are for deposit only, meaning, the recipient needs an account in Germany! Call the U.S. headquarters in Washington, DC at +1(800)424-2923 to set up an account. Their website provides a list of regional offices.

Sending money from Germany

Cash advances from a credit card

Some German credit cards let you maintain a balance on them by transferring money to a special account (ask the issuer of your credit card how to do this). If you have a balance on your card, you can obtain a cash advance up to the amount you have on the card, rather than being restricted by the usual per-day maximum advances. Depending on the credit card, a cash advance will then cost you the same as using the card for purchases abroad, usually between 1% and 2% of the total amount.

Transferring from a German bank to an American bank

Most German banks have close relations with at least one American bank and let you transfer money to any account with an American bank. You get usually hit with fees on either end. Deutsche Bank charges currently 14 DM for each transfer to an American bank.

German account -> EC ATM

Take along your Eurocheque (EC) card as long as you are travelling within Europe (and selected other countries; ask your local bank). Then you can get money from every ATM (Geldautomat) with EC sign.

The fee is DM 5 for every take, but you get the interbank exchange rate rather than the marked down rates you get for traveler's checks or cash exchanges (shudder).

Travelers checks

You pay DM 10 at the time you buy DM-denominated travelers checks. Supposedly you should be charged no additional fees when you redeem them at your destination for their currency, which, however, does not turn out to be true in some places, as s.c.g readers report. Theoretically, in such cases, you can be reimbursed by your local German bank, once you are back ...what an overall hassle... 1996-10

23.2 Exchange Rates?

On the web:

23.3 Tax

VAT in Germany?

In Germany every retail price includes 16% Value Added Tax (VAT) (in German: Mehrwehrtsteuer, MwSt). If you buy goods in Germany and plan to take them with you to a foreign country it is possible to get a refund for the VAT. In some places you even get a discount in the shop. To get the VAT refunded you usually need some proof that you do not life in Germany (Passport ...) and a special receipt from the store. It is possible for Germans to get a refund if their Passport shows a foreign address. Then ask for your refund at the border or airport (if the store did not deduct the tax already). Please ask the customs people for details. This refund might be not available for residents of European Community member states.

Tax Treaty?

The US and Germany have a tax treaty. This means that, as a US citizen, you only pay taxes to the IRS if your US taxes would be higher than your German taxes. So if your US taxes under your income would have been US$1000, and you paid US$900 to the Finanzamt, then you'd owe US$100 to the US government.

On basis of this tax treaty German students, studying and working in the US, might be able to claim tax exemption for part or all of their US income. The key is whether you receive an assistantship or a fellowship. According to the US-German tax treaty special taxation of assistantships is limited to four years (maximum presence for these rules to apply) and $5000 per year are tax exempt (Treaty Article 20(4), Compensation during study or training.)

Fellowships, however, have no limit in terms of time of presence nor in the amount (Treaty Article 20(3), Scholarship or fellowship grant,) i.e. as long as you receive a fellowship in the sense of this treaty your total "income" is tax exempt. Conclusion: try to get a fellowship.

23.4 Currency Names and Nicknames


Supposedly Mark was a term coined in Cologne. People there used to put marks in equal distances on silver bars, and cut them at these marks if they needed smaller amounts of silver to pay someone. So the smallest fraction of one silverbar was one Mark.

The Mark has gone through quite some changes with history:

Before 1871

Germany was comprised of some 40 single kingdoms, each of whom had their own currency with their own name.


United Germany comes into existance, and so does the Mark.

1871 - 1923

Mark (abbreviated M)


Hyperinflation after WW1 causes the value of the Mark to drop by a factor 1,000 each month. At the end of the year, prices like 1,000 billion Mark for everyday items are common. A new currency was introduced, rendering old money worthless.

1923 - 1924


1924 - 1948

Reichsmark (RM)

After WW2

The four allied forces (U.S.A., Great Brittain, France on the one hand and USSR on the other) introduce new currencies in their respective zones. The former three agree to use the same kind, whereas the latter choose a different one. (Soon after this the two post-war States of Germany were established.)

Period West East
1948 - 1964 Deutsche Mark (DM) Deutsche Mark (DM) (same name butdifferent!)
1964 - 1967 (same) Mark der Deutschen Notenbank (MDN)
1967 - 1990 (same) Mark der DDR (M)
1990 (same) adoption of West German currency
1990 - today Deutsche Mark

Groschen (10 Pfennige)

The Groschen was an official currency unit in Prussia until 1871. The Prussian currency was the Taler (see below.) 1 Taler = 30 Groschen = 300 Pfennig (originally, 360 Pfennig, but this changed in the 1850s). The Taler currency was also in use in smaller states in northern Germany.

Note that the Austrian Groschen (1/100 Schilling) is quite different from the German Groschen. 1997-01

Taler (3 Mark)

remained a common term for 3 Mark coins until they were discontinued a few years before WW I. It has the same origin, by the way, as the US Dollar, the Danish Rigsdaler and the Swedish Riksdaler. (If you pronounce it correctly you'll still hear it ;-) Namely, they stem from the name of the currency used in the area of Joachimsthal in the 16-th century: the Joachims-Thaler. 1996-10

Sechser (5 (!) Pfennige)

The term dates back to the mid-19th century. Until the 1850s, a Groschen had 12 Pfennige, and a Sechser was therefore half a Groschen. When the Groschen later lost 2 Pfennige and was only 10, the new 5 Pfennig coins were still, colloquially, called Sechser, which persists until today.

Heiermann (5 Mark)

It appears that, in the 1950's, 5 DM would buy you some fun with a prostitute in Hamburg's redlight district St.Pauli. A colloquial expression for a bed is Heia, which is pronounced the same way as Heier ...

Zwickel (2 Mark)

Casual name for the 2 Mark coin; some loved/hated politicians' portraits have appeared on its backside recently. (Strauss, Brandt etc.)

Pfund (20 Mark)

A less common term is Pfund (pound) for 20 DM. This might date back to times when a British pound was still a pound and worth about 20 DM.

Hunni or Blauer (100 Mark)

Very simply derived from the blue color of the hundert Mark note.

Riese (1000 Mark)

Riese means giant, you get the idea.

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