22 January 2013

Banking in Berlin

I am slowly realizing that banking is a service. After all, banks provide financial services to you, the customer, so that you don't have to hide all your money under your bed. And since this is a service, then they are a business. And they need to earn money too.

So, given this service, the customer (you and me) pay for it. We pay for the opportunity to have an institution keep our money for safe-keeping. We pay for the opportunity to have a card that allows us to do transactions online, for example. We pay for the services such as transferring money to an overseas bank account. And now that I am experiencing different banking traditions, I am slowly realizing that.

When I was in the United States, I didn't have a credit card. I only had a debit card, but that debit card had credit card functionality. Here, my debit card doesn't have that. It is a simple ATM card, but it has no 16 digit numbers so I cannot use it to make purchases online. Instead, Germans prefer the direct debit bank transfer method. It is all okay if all your business transactions are within Germany, but it is a problem when you're reserving hotels overseas.

I just came from the bank to do an international wire transfer to the Netherlands. I had to pay a conference fee ahead of time, and since I don't own a credit card, I did a bank transfer, complete with IBANs and BICs.

While I was at the bank, I also asked whether I can deposit the official check I received from KeyBank, my former US bank. I had an official check for 20.26 USD, which is the remaining balance from my previous account. I was advised by KeyBank to slowly reduce my balance to under 100 USD in order to close it from overseas. So a few months ago, I withdrew my balance little by little, until I was able to bring it down to 20.26 USD. Hence, since it was under 100 USD, I can request to close it from overseas.

So they mailed me an official check, for 20.26 USD. However, when I got to my German bank, they told me that there is a commission fee of 15 EUR for depositing a foreign check. And guess what, 15 EUR is equal to 20 USD. So pretty much the deposit will be for nothing. So I decided not to deposit this check, and hang on to it for a while. Maybe if I find myself in the USA again, I might be able to cash it. Who knows.

Oh, I had applied for another bank account with a different bank a while ago. They offer fee-less services, including a credit card. They asked for my financial statements, such as an employment contract, as well as a copy of my salary statement. I haven't heard from them yet, but hopefully, there wouldn't be a problem. If I get this, then this would be my first ever credit card. Now my problem will be solved, hopefully.

Now, the question is, why have I not applied for an account with this bank in the first place? Well, they are different. They don't have branches. You only deal with them online and through ATMs of other banks. So banks are different here apparently. I have an account with Commerzbank, which is a traditional bank, with real people and real branches, and I am trying to get an account with the Deutsche Kreditbank, which is less traditional given the reasons I mentioned above. Each bank has its advantages, and disadvantages.

(Nudes, from my Art Institute of Chicago Series)


  1. International banking can be a pain... and it's expensive too. I closed my French bank account years ago because it just wasn't worth it, the fees to keep it open were too high. But my Canadian bank has a partnership with a French bank so when I withdraw money at their ATMs in France, I don't pay any fee.

    1. Zhu,

      You would assume that since the world is getting smaller and smaller, things like these would get easier. But no, it's still a pain. Although I am glad that at least in the EU, there's this thing called SEPA, which means that inter-EU transactions are now treated as domestic.