Germany has a unique payment culture that often surprises newcomers and expats. While many countries rely heavily on credit cards for everyday transactions, Germans place a strong emphasis on debit cards and cash. Credit cards are used less frequently, often reserved for online shopping, travel, or larger purchases.
The difference between debit and credit cards goes beyond just the payment method. Each card type serves a distinct purpose, comes with specific features, and is issued by different German banks under varying conditions. From my experience, knowing the advantages and limitations of these cards can make managing finances for expats and residents in Germany easier.
In this article, I will dive deep into the differences between debit and credit cards in Germany. I will explore the types of credit cards available—such as revolving, charge, and prepaid—as well as the types of debit cards, including the Girocard and Visa or Mastercard Debit. I will also highlight which banks offer these card types, ensuring you have all the information to decide on the best card type for your situation.
This essay is part of my Ultimate Guide on Credit Cards in Germany, explaining all the basics you need to know as an expat.
What Is a Credit Card in Germany?
There are three main types of credit cards available in Germany, each with its own features and use cases.
Types of German Credit Cards
Charge Cards
- A charge card requires the cardholder to pay off the entire balance at the end of the billing cycle, usually monthly. In most cases, the due amount is automatically debited from a connected bank account.
- Charge cards do not accumulate interest since there is no option to carry a balance.
- Examples of banks offering charge cards include DKB, Commerzbank, and American Express. It is the usual type of credit card you would get at a traditional bank combined with your current account. Oftentimes, you are required to open a current account before getting a charge credit card with that bank.
Revolving Credit Cards
Prepaid Credit Cards
Benefits and Downsides of Credit Cards in Germany
PROS
CONS
- Convenience: Credit cards are essential for online shopping, travel, and international payments. You also obtain extra liquidity and free credit as the money is only deducted from your bank account later.
- Broad acceptance: Most credit cards are accepted worldwide, making them an excellent option for frequent travelers. They are oftentimes mandatory for hotel or rental car bookings as providers can “block” specific amounts as a security deposit.
- Perks and rewards: Many credit cards offer cashback, loyalty points, or discounts on specific purchases, such as travel or dining. These perks can benefit those who strategically use their credit cards for particular expenses.
- International use: Some credit cards offer advantages such as free ATM withdrawals abroad and zero foreign-currency transaction fees. This reduces cost and makes them ideal for frequent travelers.
- Credit-building potential: Responsible credit card use can help establish a good credit history in Germany.
- Fees: Many credit cards in Germany come with annual fees, especially those offering premium features or rewards.
- Interest on revolving cards: The interest rates can be high for those who carry a balance. Also, sometimes, the repayment processes and terms are complicated to understand, and it is easy to accidentally get trapped in paying fees or interest.
- Low adoption for everyday use: Credit cards are less widely accepted in stores than cash. However, the acceptance is steadily on the rise
What Is a Debit Card in Germany?
Debit cards in Germany are the primary cashless payment method for most residents. Unlike credit cards, which allow users to borrow money up to a limit, debit cards are directly linked to a bank account. When you make a purchase, the funds are immediately deducted from your account, ensuring you can only spend what you have or your overdraft allows. It makes debit cards a straightforward and widely accepted option in Germany.
Types of German Debit Cards
Girocard (EC Card)
- The Girocard, often referred to as an EC card, is Germany’s national debit card system. It is the most common type of debit card in Germany, used for everyday transactions like groceries, dining, and other purchases. The cards were traditionally issued by almost all banks and are widely accepted across the country for in-store payments because of the low commissions charged to shop owners.
- While Girocard excels in local acceptance, it is not suitable for online shopping or international use unless paired with a co-badged Visa or Mastercard feature. For this reason, especially Fintechs have started switching to Visa or Mastercard Debit in recent years. While this comes with advantages abroad and online, digital payments in smaller shops may be denied.
Visa Debit / Mastercard Debit
Benefits and Downsides of Debit Cards in Germany
PROS
CONS
- Direct access to funds: Payments are directly deducted from your account, preventing overspending and debt.
- Wide acceptance: Girocards are almost universally accepted in Germany. At the same time, Visa and Mastercard Debit cards work well for domestic (with limitations in smaller shops) and international use.
- No credit check required: Unlike credit cards, debit cards don’t require a credit history or approval process other than the regular check at account opening
- Limited functionality for Girocards: Girocards cannot be used for online payments and suffer restricted acceptance abroad.
- Limited acceptance of Visa Debit or Mastercard Debit: Some smaller local stores may only accept Girocard for digital payments.
Key Differences Between German Debit and Credit Cards
Debit and credit card differ in four main areas:
- Payment Mechanics: Debit cards deduct funds directly from your bank account at the time of the transaction. Credit cards, on the other hand, allow for delayed payment, with balances due monthly or partially paid over time (in the case of revolving credit).
- Usability: Debit cards, especially Girocards, are widely accepted for in-store payments within Germany but may lack utility for online shopping or international transactions. Credit cards, including Visa and Mastercard, are more versatile and widely accepted globally, making them ideal for travel and online purchases.
- Fees: Credit cards often come with annual fees, especially for premium options or cards with perks. Revolving credit cards may incur high interest charges. Debit cards usually have minimal or no fees, although Visa and Mastercard Debit cards may charge for certain transactions like ATM withdrawals abroad.
- Creditworthiness: Credit cards require a credit check by Schufa, whereas debit cards generally do not. This makes debit cards accessible to individuals in Germany without an established credit history, such as newcomers and students.
Should You Get a Debit or a Credit Card in Germany?
Let us start with the obvious. You will always have a debit card as soon as you sign up for a local German bank account. With a debit card, you are covered for the usual everyday scenarios. Then, you can decide which type of debit card makes more sense to you. My personal advice and experience is the following:
- If you want a credit card anyway, get a bank that offers a Girocard. In Germany, all places that accept Visa or Mastercard usually accept both debit and credit cards. So, you are covered for all scenarios.
- If you only want a debit card, choose a Visa or Mastercard Debit. It makes sure that you are well-suited for online shopping and international travel. Also, the vast majority of retailers should accept it as the number of stores that only accept Girocard is continuously falling.
When Should You Get a German Credit Card?
Even though some premium debit cards like N26 Metal also offer advanced services, credit cards are beneficial in the following scenarios:
- You travel a lot: Many free cards or travel credit cards offer zero fees for transactions in foreign currencies and complementary ATM withdrawals. Also, they enable you to guarantee hotel and rental car bookings.
- You want extra flexibility: Credit cards give you access to free credit before the end of the billing cycle. With a revolving credit card, you can also pay your bills in installments. These factors help you if you are on a tight budget or have to advance a lot of costs before you get reimbursed (i.e., for business travel or work equipment)
- Cashback and rewards pay off for you: Some credit cards allow you to earn cashback, hotel points, and airline miles while spending or include generous perks such as insurance, travel, or restaurant vouchers.
However, applying to credit cards is dependent on credit checks. Hence, if you have just arrived in Germany without a credit history or do not have a steady income because you are a student or looking for work, your only option might be a debit card. However, there are special credit cards for expats and students nowadays.
Conclusion
Debit cards, such as the Girocard and Visa Debit, are the basis for every local and expat in Germany. They are widely accepted for everyday use in Germany, offering simplicity and control over spending. In contrast, credit cards—be it charge, revolving, or prepaid— can provide extra financial flexibility, global acceptance, and perks, making them suitable for specific purposes like travel or online shopping.
If you require and are entitled to a credit card, it depends on your personal situation. If you need more support choosing the right debit or credit card, check our dedicated pages on free German bank accounts and the best German credit cards.
Your Ultimate Guide to Credit Cards in Germany
Understand everyhing that there is to know about German credit cards in our resources.
