Discovering the Best Free Credit Card for Students in Germany was a whole new experience for me when I first arrived in the country as a student. The need for a credit card only arose when I had to book a flight back home from Germany.
At that point, I realized I had no prior experience with credit cards and was unsure about the features to consider and potential pitfalls. I encountered information that was primarily in German or not directly applicable to a student in Germany. That’s why this guide aims to share insights into the Best Free Credit Cards for Students in Germany. I will compare some of the top free credit cards, discuss the key features to explore, and highlight essential considerations before obtaining a credit card as a student in Germany.
Free Credit Card for Students in Germany
What types of cards available in Germany
Before we dive into the Free Credit Cards available in Germany, let’s quickly define what cards you will find in Germany. You will hear about different kinds of Cards, for example:
- EC Karte
- Giro Karte
- Debitkarte
- KreditKarte
The most common card you’re probably familiar with is the debit card. It’s the card you usually get for free when you open a bank account.
With a debit card, when you make a payment or withdraw money, the amount is directly taken from your account in real-time. So, it’s not really a credit card since there’s no actual credit involved.
Related Guide: Best Free Bank Account in Germany
Types of Credit Cards in Germany
In Germany, there are two types of cards that people commonly call credit cards.
Charge Credit Card
The first type is a charge credit card. These are the most commonly used credit cards in Germany. With a charge card, you can make purchases and pay for them at a later date, usually within four weeks. There’s no spending limit on the card, so you have the flexibility to buy what you need.
For instance, let’s say you want to purchase a new bicycle. You may not have the money right now, but you know you’ll have it in a few weeks. You can use a charge card to buy the bicycle, and the payment for it will be due four weeks later. When the due date arrives, the full amount will be automatically deducted from your bank account, and your charge card balance will be cleared.
Revolving Credit Card
The second type is a revolving credit card. With this type of card, you’re not required to pay the full bill amount for your monthly expenses all at once. Instead, you can choose to make smaller payments over time.
Let’s say you have monthly expenses of 1000 euros on your revolving credit card. Rather than paying the full 1000 euros the following month to bring the balance back to zero, you have the option to make smaller payments, such as 100 euros, over a few months. It provides you with the flexibility to manage your payments based on your financial situation.
However, it’s important to note that the credit card company will charge interest on the outstanding balance, which I will explain further in the video.
When do students in Germany need a free credit card?
Now, let’s ask ourselves why we would actually need a real credit card, as opposed to a prepaid or debit card, especially if we’re in Germany. Well, typically, within Germany, a debit card is usually sufficient. You can use it to make payments at many places and withdraw cash for free.
However, a credit card becomes particularly interesting when you’re traveling abroad. With many credit cards, you can withdraw cash for free in foreign countries, both in your own currency (like the euro) and in foreign currencies. Debit cards don’t have this function.
Additionally, credit cards offer a line of credit, which can be useful for short-term liquidity needs.
Why students in Germany should not get a Credit Card
Students in Germany, often (trust me I would know) struggle with money. This is where most student actually struggle and should not get a Credit Card. Let me share a story with you.
A few years ago, my friend had a situation where he needed money to deposit into his blocked account for the 3rd semester. He decided to use his credit card to withdraw 3000 Euros, which he then put into his blocked account. This helped him secure a 6-month visa. However, he didn’t consider two important things.
Never use entire Credit Limit
Firstly, he had used up his entire credit limit on the card. This had a negative impact on his Credit Score or SCHUFA score. This score plays a big role in Germany when it comes to opening a bank account, getting a phone contract, or even getting a loan.
So, by withdrawing up to his credit limit, my friend ended up with a lower SCHUFA score, which had an effect on his financial opportunities.
Negative records in the SCHUFA can impact your score for up to 3 years, even after the case is resolved, and they can be kept as a “side note” for up to 6 years overall.
Related Guide: Credit Score in Germany (Schufa Explained)
Do not forget about the Interest Rate
Secondly, my friend didn’t account for the interest he had to pay on the cash withdrawal. At that time, the interest rate on credit cards was around 15%, but now it’s about 25%. So, as my friend paid back the 3000 Euros over 12 months, he had to pay an additional 500€ in interest.
If he were to do the same today, he would have to pay an additional 750€ instead of €500. This miscalculation was a big mistake, and it left my friend feeling frustrated.
That’s why it’s important to remember that using credit can be expensive. It’s best to consider it as an option only and focus on building up savings as much as possible.
Top 3 Best Free Credit Cards in Germany
Alright, lets talk about 3 Free Credit Cards in Germany that I think are the best for Students in Germany.
- Advanzia Bank Gebuhrenfrei Mastercard Gold which has an extremely high acceptance Rate
- TF Bank Mastercard Gold with Interest-free purchases for up to 51 days
- Bank Norwegian Visa Credit Card with free auto repayment function
Lets discuss the Important Features of these Free Credit Cards
Free Revolving Credit Cards for Students in Germany
All three of these Credit Cards are Revolving cards, meaning that You can either pay off the monthly statement in full, which will remain interest-free, or you can pay it in installments with gradually decreasing interest rates.
Annual fees and acceptance
Again all three of these credit cards for students in Germany are totally free, meaning that there is not credit card opening fees and not mentenance fee. They also have no annual fees and there is no minimum turnover required. Advanzia bank and TF bank both offer Mastercard while Bank Norwegian offers Visa.
Both Visa and Mastercard offer a high level of acceptance worldwide in various stores, service providers, and ATMs. And are widely accepted in most companies both domestically and internationally.
Cash Withdrawals
Let’s talk about cash withdrawals. With the Mastercard Gold from Advanzia bank and TF bank you can withraw cash free of charge worldwide from any ATM that has the Mastercard Symbol.
Similarly with the Bank Norwegian credit card you can withdraw cash for Free world wide from any ATM that has the Visa symbol. There are no foreign transaction or foreign currency fees.
One thing to notice here is that even though cash transactions are free with these credit cards, some banks have their own withdrawal charges so please check the ATM machine for more details. Another thing to consider is that in most cases, interest is charged from the day of withdrawal until settlement .
Interest Rate on Free Credit Cards for Students in Germany
TF Bank Credit Card, has an effective annual interest rate of 24.79% percent. This interest is charged if you do not settle your card payments in full and pay in partial amounts.
Furthermore, interest applies from the first day if you use the card to withdraw money. Regardless of whether the settlement is paid in full. So, only card payments that are paid in full with the monthly credit settlement are interest-free.
At Advanzia Gebührenfrei Credit Card , the effective annual interest rate is 24.39% on partial payments. Again with the Gebuhrenfrei Cash withdrawals are subject to interest from the day of the withdrawal.
Bank Norwegian Credit Card has an effective annual interest rate of 24,4 %. Here cash withdrawals are not subjected to interest from the first day of withdrawal and only apply if you pay your credit card bill in partial payments.
Interest-free payments
If you do not use the TF Bank Mastercard Gold for cash withdrawals and always pay the monthly bill in full, you have an interest-free payment period of up to 7 weeks.
The same applies to the Advanzia Mastercard Gold. If you do not use it for cash withdrawals and always pay the monthly bill in full, you have an interest-free payment target of up to seven weeks.
Remember !!! There is NO AUTOPAY option available, meaning that you have to pay your invoice manually. So please do not forget it!
With Bank Norwegian Credit Card you have an interest free period of upto 45 days and they have an autopay feature which allows you to pay your bill automatically.
Credit limit of Free Credit Cards for Students in Germany
The credit limit that you receive from all three credit cards is granted individually based on your creditworthiness. Over time, the credit limit can be automatically increased if there are no payment delays.
With the TF Bank and Advanzia Bank credit cards , it is not possible to transfer credit to the card to increase the credit limit. But with the Bank Norwegian Credit Card you can add funds to your credit card beforehand but remember there is no way to cash this amount without using it as a payment.
Additionally with the Advanzia Bank Gebührenfrei your staring credit limit can be as low as 100€.
Free Insurance with Credit Card for Students in Germany
All three credit cards offer free travel insurance, which is especially interesting because the Credit Cards come with no annual fee.
TF Bank Mastercard Gold insurance includes:
- Foreign travel health insurance
- Cancellation insurance
- Trip Interruption Insurance
- Baggage Insurance
- Flight and baggage delay insurance
- Personal liability insurance abroad
- Accident insurance
Advanzia Bank Credit Card Insurance includes:
- Travel luggage insurance
- Travel cancellation insurance
- Travel health insurance
- Travel accident insurance
- Private liability insurance for abroad
Bank Norwegian Credit Card Insurance includes:
- Trip cancellation Insurance
- Baggage insurance
- Baggage delay insurance
Registration and Approval of Credit Card for Student in Germany
This is probably the most important distinguishing factor between the three Free Credit Cards that you can get in Germany. To get the Advanzia Bank Gebührenfrei Credit Card, you only need a valid German address and Mobile Phone number to get started while for the TF Bank Mastercard Gold and the Bank norwegian Credit card you also need a valid German ID Document to get started. This can be a hinderence if you have just arrived in Germany. Additionally the Acceptance rate of Bank Norwegian Credit Card is lower than the other two options
So Which Free Credit Card is the Best for Students in Germany?
The Advanzia Bank Gebührenfrei card, the Bank Norwegian Visa card, or the TF Bank Mastercard Gold.
In my opinion, if you are new to Germany or have a weak Credit Score, the Advanzia Bank Credit Card is the best choice. On the other hand, the TF Bank card offers better insurance options and provides more opportunities for Cash Back rewards. The Bank Norwegian Credit Card is good for Cash Withdrawals and has an auto repayment feature.
If you want to learn more about these Free Credit Cards in Germany, you can check out my reviews for each of them or head over to the credit Section to checkout the other Free Credit Cards in Germany.
Disclaimer: None of the content in this article is meant to be considered as investment advice, as I am not a financial expert and am only sharing my experience with stock investing. The information is based on my own research and is only accurate at the time of posting this article but may not be accurate at the time you are reading it.