7 ms·

Yup. Germany has one of the lowest adoption rates of credit products such as the humble credit card out of nearly all Western nations. Debt is not liked. Edi

by buro9 10y ago

Yup. Germany has one of the lowest adoption rates of credit products such as the humble credit card out of nearly all Western nations. Debt is not liked. Edit: From the same site, the linked article at the bottom has the answer: http://qz.com/262595/why-germans-pay-cash-for-almost-everything/ http://qz.com/262595/why-germans-pay-cash-for-almost-everyth... A better link: http://www.businessinsider.com/you-have-to-understand-germanys-long-standing-fear-of-debt-2012-7?IR=T http://www.businessinsider.com/you-have-to-understand-german...

premium-concern 10y ago
Yep. "Don't buy things if you can't pay for then." sounds reasonable, but some other countries seem to disagree. Not surprised that those countries suffer from government shutdowns over how much the debt ceiling is raised.
- thesimon 10y ago
  >suffer from government shutdowns over how much the debt ceiling is raised On the other hand: The government shutdown because of the debt ceiling seems just like "Stop hitting yourself" on the playground. And Germany's budget is far from balanced.
  - buro9 10y ago
    The myth of the balanced budget. The article speaks of consumer debt, I spoke of consumer debt. Government debt is a different thing, and a government without any debt doesn't sound like a wise thing if it is even possible in such a highly integrated and globalised world.
  - nailuj 10y ago
    > And Germany's budget is far from balanced. Hmm? http://www.bloomberg.com/news/articles/2016-08-17/germany-plans-to-cut-2017-debt-sales-amid-balanced-budget-push http://www.bloomberg.com/news/articles/2016-08-17/germany-pl...
  - mpweiher 10y ago
    >And Germany's budget is far from balanced. "Germany recorded a Government Budget surplus equal to 0.70 percent of the country's Gross Domestic Product in 2015. " While it's true that the budget is not balanced, a 0.7%/GDP surplus is pretty darn close. http://www.tradingeconomics.com/germany/government-budget http://www.tradingeconomics.com/germany/government-budget
  - kriro 10y ago
    Nominally Germany has a balanced budget. I agree it isn't really balanced and the big zero is just achieved via some shifting around of things. However the fact that the government jumps through all sorts of hoops to be able to say the budget is balanced is at least an interesting indicator that it does seem to matter to enough people.
    - premium-concern 10y ago
      Even government budgets have to adhere to some standardized schemes of reporting. See also rating firms. Otherwise even the US would have a balanced budget and no debts. (Ignoring the fact that the US is the main force behind trying to change the account rules to make them look less bad.)
- 0xcde4c3db 10y ago
  In the US, at least, the shutdowns don't have much to do with our actual spending/borrowing habits. It's a structural quirk of government operation that provides a handy perennial disaster to use for political brinkmanship and finger-pointing. Basically "if you don't start being reasonable by caving to my demands, then you're going to cause a government shutdown".
  - premium-concern 10y ago
    > political brinkmanship and finger-pointing The difference is that parties that try to pull that in Germany not only loose elections, but are punished so hard by voters that they can't even get over the necessary 5% requirement in the next election. Have a look what happened to the FDP after they pushed through lower taxes for hotels.
    - DasIch 10y ago
      In Germany not passing a new budget wouldn't let to a government shutdown. So it's not an option anyway.
      - premium-concern 10y ago
        Even if it did, it wouldn't matter, because people would vote those politicians that tried this shit and their party out of office.
- webkike 10y ago
  Using credit cards does not preclude being able to afford the thing you are paying for. I regularly use my credit card for every day purchases despite having ample money in my checking account. The regular payments allow me to develop a good credit history without much worry.
  - josefresco 10y ago
    Bingo. Unfortunately the common assumption is that you're not paying it off monthly and paying high interest.
    - fwn 10y ago
      Which, by the way, sounds like an awful concept of how creditworthiness is created. Signing into some unnecessary additional financial product with comically obsolete interest rates, just to manually repay it in the random timeframe in which the (still unnecessary) credit is free sounds like a bad idea. It's probably only there to nudge people into paying interest on money they already have.
      - josefresco 10y ago
        Credit history is just a history of making payments on-time. You can build a history by making student loan payments, car payments, health care payments etc. Obviously it's only one factor in someone's credit worthiness, however it's not a bad metric. If you pay your bills on-time, it makes sense that a lender would value you higher/safer than someone who does not.
      - hx87 10y ago
        > the random timeframe in which the (still unnecessary) credit is free Are you talking about the 0% APR period, or the monthly revolving cycle? The latter is absolutely predictable, and if you dislike manual payments you can always set up automatic ones.
  - kriro 10y ago
    Why can't you use a debit card for that? Isn't having enough money in your checking account to reasonably afford all stuff you need to live basically proof of a good credit history? Isn't the best credit history one where you never need credit in the first place?
- maxsilver 10y ago
  Disagree might not be the right word, "force" is probably more accurate. In many countries, it would be effectively impossible for most regular people to get basic living needs (like housing and transportation) if they couldn't buy them using some amount of credit. Obviously it shouldn't be this way, it should be possible to save and buy these things outright. But since it effectively isn't (for many people, in many places) I wouldn't fault people for taking on debt to do things like put a roof over their head or get to work on time reliably.
- snowwrestler 10y ago
  I can pay for my house--over time. Which is fine because I'm also living in my house over time.
- gozur88 10y ago
  Government shutdowns in the US are largely theater. The last time they only halted 15% of expenditures.
thesimon 10y ago
>such as the humble credit card out of nearly all Western nations Of course using your overdraft is totally fine, but using the evil credit cards even when paying in full is just like declaring bankruptcy. Doesn't help payment services in Germany that Visa/MasterCard is always considered an evil credit card and debit brands aren't too common.
- Noseshine 10y ago
  From the PoV of someone who once co-owned a small business in Germany that accepted card payments: The reason they are "evil" is that they charge the dealer the by far largest fees. Cache: no fee. EC card: small fee. Credit card: large fee. And of course I can't ask the customer to pay for it, I must have one price for all. It was something like 1% vs. 3% (approximately(!), just to give an idea of magnitude). It's not even any more convenient. Except for a few places like car rentals, where the credit card serves an insurance function (the rental deposit), there is exactly zero reason to point to convenience. Just use an EC card or a bank card that's attached to the major payment processing networks, everybody has one. On the other hand, most credit cards cost a yearly fee of 20-70 Euros or so. The only reason I grudgingly pay for one is because I rent a car occasionally.
  - fwn 10y ago
    That's quite interesting. I rent cars quite frequently with the boring free VISA debit card from my normal checking account. I never knew that there are restrictions on which cards can be used for renting.
    - Noseshine 10y ago
      It's not so much a restriction, and it differs from company to company. For example, I rented twice this year - I don't own a car and usually use the train - and the first time they wanted my to enter the PIN for the credit card, which I didn't know. A big hassle, they took (real!) money off of my EC card (which I got back afterwards). The second time I didn't need a PIN (different car rental company), but they helped themselves to almost 800 Euros in alleged damages from my credit card (good thing I had used an online service and opted into the "we pay the deductible", which was 1,000 Euros, on the full insurance I had also selected to get).
thatfrenchguy 10y ago
Never seen credit cards outside of the US/UK/Canada...
- ghaff 10y ago
  I use them in continental Europe and Asia all the time. Maybe they're not as common but they certainly aren't anything like unheard of even if they're not as universal as in the US.
- dirktheman 10y ago
  Here in the Netherlands credit cards are used almost exclusively for online purchases. If you're a (brick) store owner and you would like to accept credit cards at your payment terminal you pay a hefty premium for that transaction. It's usually around 5% of the total amount. Debit cards, that's another story. Most people pay with their debit cards instead of cash. It's convenient, even more so since the introduction of contactless bank cards.
- coldtea 10y ago
  They are used all over the world, including in France. Not sure what are you talking about... Except if you live in some rural area...
  - Xixi 10y ago
    I don't know many people who use credit cards in France. Practically everybody use the so-called CB which is a debit card (either immediate or deferred, usually deferred), not a credit card. It doesn't allow you to accrue debt: the balance is always re-paid in full, and the linked bank account (usually a checking account) will go red in case of overspending. That said there are definitely credit cards, usually linked to big retailers (Auchan, etc.), but are they that popular?
    - coldtea 10y ago
      From what I see, most people use the CB, but: "Euromonitor International, a market research company, estimated that there were just 34 million French credit cards in circulation" (0.5 per person, in contrast the US has ~4 cards per person). Average credit card spending per French annually is $300 -- so quite insignificant compared to Americans (which would be almost half their annual salary if not more).
cylinder 10y ago
And yet the public debt of Germany is just as high as these credit addicted nations, what does that say?
- MagnumOpus 10y ago
  Gross debt is as high. Net debt is way lower than in the US let alone in the UK, Japan or Club Med countries. (The German Feds and the states own parts of a lot of strategic income producing companies - KfW state investment bank, Deutsche Bahn, Volkswagen etc).
- wolfgke 10y ago
  > And yet the public debt of Germany is just as high as these credit addicted nations, what does that say? That in the past Germany was not so sensible about its budget.

by buro9 10y ago

premium-concern 10y ago

Yep. "Don't buy things if you can't pay for then." sounds reasonable, but some other countries seem to disagree. Not surprised that those countries suffer from government shutdowns over how much the debt ceiling is raised.

thesimon 10y ago
>suffer from government shutdowns over how much the debt ceiling is raised On the other hand: The government shutdown because of the debt ceiling seems just like "Stop hitting yourself" on the playground. And Germany's budget is far from balanced.
- buro9 10y ago
  The myth of the balanced budget. The article speaks of consumer debt, I spoke of consumer debt. Government debt is a different thing, and a government without any debt doesn't sound like a wise thing if it is even possible in such a highly integrated and globalised world.
- nailuj 10y ago
  > And Germany's budget is far from balanced. Hmm? http://www.bloomberg.com/news/articles/2016-08-17/germany-plans-to-cut-2017-debt-sales-amid-balanced-budget-push http://www.bloomberg.com/news/articles/2016-08-17/germany-pl...
- mpweiher 10y ago
  >And Germany's budget is far from balanced. "Germany recorded a Government Budget surplus equal to 0.70 percent of the country's Gross Domestic Product in 2015. " While it's true that the budget is not balanced, a 0.7%/GDP surplus is pretty darn close. http://www.tradingeconomics.com/germany/government-budget http://www.tradingeconomics.com/germany/government-budget
- kriro 10y ago
  Nominally Germany has a balanced budget. I agree it isn't really balanced and the big zero is just achieved via some shifting around of things. However the fact that the government jumps through all sorts of hoops to be able to say the budget is balanced is at least an interesting indicator that it does seem to matter to enough people.
  - premium-concern 10y ago
    Even government budgets have to adhere to some standardized schemes of reporting. See also rating firms. Otherwise even the US would have a balanced budget and no debts. (Ignoring the fact that the US is the main force behind trying to change the account rules to make them look less bad.)
0xcde4c3db 10y ago
In the US, at least, the shutdowns don't have much to do with our actual spending/borrowing habits. It's a structural quirk of government operation that provides a handy perennial disaster to use for political brinkmanship and finger-pointing. Basically "if you don't start being reasonable by caving to my demands, then you're going to cause a government shutdown".
- premium-concern 10y ago
  > political brinkmanship and finger-pointing The difference is that parties that try to pull that in Germany not only loose elections, but are punished so hard by voters that they can't even get over the necessary 5% requirement in the next election. Have a look what happened to the FDP after they pushed through lower taxes for hotels.
  - DasIch 10y ago
    In Germany not passing a new budget wouldn't let to a government shutdown. So it's not an option anyway.
    - premium-concern 10y ago
      Even if it did, it wouldn't matter, because people would vote those politicians that tried this shit and their party out of office.
webkike 10y ago
Using credit cards does not preclude being able to afford the thing you are paying for. I regularly use my credit card for every day purchases despite having ample money in my checking account. The regular payments allow me to develop a good credit history without much worry.
- josefresco 10y ago
  Bingo. Unfortunately the common assumption is that you're not paying it off monthly and paying high interest.
  - fwn 10y ago
    Which, by the way, sounds like an awful concept of how creditworthiness is created. Signing into some unnecessary additional financial product with comically obsolete interest rates, just to manually repay it in the random timeframe in which the (still unnecessary) credit is free sounds like a bad idea. It's probably only there to nudge people into paying interest on money they already have.
    - josefresco 10y ago
      Credit history is just a history of making payments on-time. You can build a history by making student loan payments, car payments, health care payments etc. Obviously it's only one factor in someone's credit worthiness, however it's not a bad metric. If you pay your bills on-time, it makes sense that a lender would value you higher/safer than someone who does not.
    - hx87 10y ago
      > the random timeframe in which the (still unnecessary) credit is free Are you talking about the 0% APR period, or the monthly revolving cycle? The latter is absolutely predictable, and if you dislike manual payments you can always set up automatic ones.
- kriro 10y ago
  Why can't you use a debit card for that? Isn't having enough money in your checking account to reasonably afford all stuff you need to live basically proof of a good credit history? Isn't the best credit history one where you never need credit in the first place?
maxsilver 10y ago
Disagree might not be the right word, "force" is probably more accurate. In many countries, it would be effectively impossible for most regular people to get basic living needs (like housing and transportation) if they couldn't buy them using some amount of credit. Obviously it shouldn't be this way, it should be possible to save and buy these things outright. But since it effectively isn't (for many people, in many places) I wouldn't fault people for taking on debt to do things like put a roof over their head or get to work on time reliably.
snowwrestler 10y ago
I can pay for my house--over time. Which is fine because I'm also living in my house over time.
gozur88 10y ago
Government shutdowns in the US are largely theater. The last time they only halted 15% of expenditures.

thesimon 10y ago

>such as the humble credit card out of nearly all Western nations Of course using your overdraft is totally fine, but using the evil credit cards even when paying in full is just like declaring bankruptcy. Doesn't help payment services in Germany that Visa/MasterCard is always considered an evil credit card and debit brands aren't too common.

Noseshine 10y ago
From the PoV of someone who once co-owned a small business in Germany that accepted card payments: The reason they are "evil" is that they charge the dealer the by far largest fees. Cache: no fee. EC card: small fee. Credit card: large fee. And of course I can't ask the customer to pay for it, I must have one price for all. It was something like 1% vs. 3% (approximately(!), just to give an idea of magnitude). It's not even any more convenient. Except for a few places like car rentals, where the credit card serves an insurance function (the rental deposit), there is exactly zero reason to point to convenience. Just use an EC card or a bank card that's attached to the major payment processing networks, everybody has one. On the other hand, most credit cards cost a yearly fee of 20-70 Euros or so. The only reason I grudgingly pay for one is because I rent a car occasionally.
- fwn 10y ago
  That's quite interesting. I rent cars quite frequently with the boring free VISA debit card from my normal checking account. I never knew that there are restrictions on which cards can be used for renting.
  - Noseshine 10y ago
    It's not so much a restriction, and it differs from company to company. For example, I rented twice this year - I don't own a car and usually use the train - and the first time they wanted my to enter the PIN for the credit card, which I didn't know. A big hassle, they took (real!) money off of my EC card (which I got back afterwards). The second time I didn't need a PIN (different car rental company), but they helped themselves to almost 800 Euros in alleged damages from my credit card (good thing I had used an online service and opted into the "we pay the deductible", which was 1,000 Euros, on the full insurance I had also selected to get).

thatfrenchguy 10y ago

Never seen credit cards outside of the US/UK/Canada...

ghaff 10y ago
I use them in continental Europe and Asia all the time. Maybe they're not as common but they certainly aren't anything like unheard of even if they're not as universal as in the US.
dirktheman 10y ago
Here in the Netherlands credit cards are used almost exclusively for online purchases. If you're a (brick) store owner and you would like to accept credit cards at your payment terminal you pay a hefty premium for that transaction. It's usually around 5% of the total amount. Debit cards, that's another story. Most people pay with their debit cards instead of cash. It's convenient, even more so since the introduction of contactless bank cards.
coldtea 10y ago
They are used all over the world, including in France. Not sure what are you talking about... Except if you live in some rural area...
- Xixi 10y ago
  I don't know many people who use credit cards in France. Practically everybody use the so-called CB which is a debit card (either immediate or deferred, usually deferred), not a credit card. It doesn't allow you to accrue debt: the balance is always re-paid in full, and the linked bank account (usually a checking account) will go red in case of overspending. That said there are definitely credit cards, usually linked to big retailers (Auchan, etc.), but are they that popular?
  - coldtea 10y ago
    From what I see, most people use the CB, but: "Euromonitor International, a market research company, estimated that there were just 34 million French credit cards in circulation" (0.5 per person, in contrast the US has ~4 cards per person). Average credit card spending per French annually is $300 -- so quite insignificant compared to Americans (which would be almost half their annual salary if not more).

cylinder 10y ago

And yet the public debt of Germany is just as high as these credit addicted nations, what does that say?

MagnumOpus 10y ago
Gross debt is as high. Net debt is way lower than in the US let alone in the UK, Japan or Club Med countries. (The German Feds and the states own parts of a lot of strategic income producing companies - KfW state investment bank, Deutsche Bahn, Volkswagen etc).
wolfgke 10y ago
> And yet the public debt of Germany is just as high as these credit addicted nations, what does that say? That in the past Germany was not so sensible about its budget.