What is important when offering a commercial property

Good real estate agents not only find a solvent buyer promptly, but also support you in selling the property for business according to its circumstances and possibilities. Viewing appointments are arranged, coordinated and carried out professionally.

To expedite the sale and give you confidence in selecting a contractor and new owner, we check the creditworthiness of prospective buyers and obtain a concept for financing. Before an experienced commercial real estate broker makes a recommendation and suggests a buyer to you, he has obtained all the necessary checks on solvency, secure financing and customer-specific facts.

You are relieved of the entire preparation and sales phase, so that you can take care of your core business and safely outsource the brokerage.

Broker tasks in commercial real estate sales

You want to sell a house or an apartment, have no experience in the real estate market and want to avoid mistakes at all costs? Then you are well advised with the comprehensive services of a real estate agent and simplify the time-consuming and complex sale of your residential property. When you hire an agent, you don’t have to factor the sale of your property into your schedule, as all tasks are handled directly by your real estate agent and carried out in your best interest.

Basically, a real estate agent fulfils all tasks that are important before and during the sales and rental phase. He creates an exposé, determines the market value of your property, advertises your property and is then the interface between you and interested parties. While the creation and publication of an advertisement is a time-consuming but unique task, answering customer enquiries is part of the daily business of an estate agent.

Here you can find more information about the:

• Tasks of a broker

Commission for the broker: The most important regulations

More than 80 percent of all properties for sale or rent are brokered. This means that the owner commissions a real estate agent to advertise the offer and to carry out all tasks up to the conclusion of the contract on his behalf. Professional brokerage is a service that is agreed between the client and the real estate agent. After the service has been rendered, a commission, the so-called brokerage fee, is due.

Who pays the commission depends on the type of commission and the reason for the commission. If you sell your property through an estate agent, the buyer usually pays. In the case of lettings, the buyer principle has applied since 2015, so that the invoice recipient and commission payer is identical to the person who has commissioned a brokerage service.

Here you can find more information about the:

• Broker commission

Selling commercial property? Procedure, taxes & Co.

Selling commercial real estate is a complex, time-consuming task that requires expertise. Without the necessary know-how and experience in commercial property sales, mistakes are bound to happen. If the asking price is disproportionately high, you will receive few enquiries and have to be prepared for a lengthy sales process. If the price is too low, you will lose money and be dissatisfied with the sale.

Sell privately?! Avoid mistakes

Rely on experts who are experienced in the sale of commercial properties and who know what is important in the preparation of an offer, in the determination of the price and in the conversation with interested parties. Dedicate yourself to your daily tasks and choose to have your property for commercial sold professionally. Avoid making mistakes when selling real estate.

Valuation and offer price

You want to sell your property? For the successful and profitable sale of a property, a well-founded and realistic valuation is always the first step. This ultimately determines the sales price to be set. In the next step, real estate agents bring your property to solvent interested parties, here it is not only about real estate portals and marketing, also the property valuation(house valuation / apartment valuation), credit check of potential buyers, viewing appointments and negotiations are the task of the broker, up to the purchase contract, the notary appointment and tax issues. Get to know the matter of selling real estate here in the guide. Simply explained, step by step!

• Sell property

Commercial property: special case

Selling commercial property is always a special case, compared to the typical apartment or single-family home. For example, the sale of hotels and entire shopping centers, with underground parking as an extra.

Sell hotel property

Many questions also reach us specifically on the topic of selling hotels. Therefore, we have summarized the topic here once again in more detail for our readers. Especially for those who are selling a hotel for the first time, or the very first property.

Hotels have a few special parameters, for example in the valuation. Just as with commercial real estate in general, it is not only about the substance but also about the potential of the property, from the state of renovation to the location of the hotel. In very simple terms, how much will the commercial property, or in this special case the hotel, generate in the next five years? Very simply put. The valuation of the hotel is therefore much more complex.

Read more here in the small guide on the subject:

• Sell hotel

Sell mall

Shopping mall selling – Shopping behavior is changing. More and more people order items, no matter if clothes, accessories, furniture or even other knick-knacks on the internet, on online shops. Inner cities, the most expensive shopping streets, but also life in small towns is changing. Accordingly, the fluctuation in shopping centers is just as, smaller and smaller. If you are in the unfavourable situation of thinking about selling your property or shopping centre, you can find the first information here.

• Sell mall

Der Beitrag Selling Commercial Property: Procedure, brokers and property types erschien zuerst auf ℄ Real Estates.

GmbH & Co KG – formation, financing, liability & Co

The limited partnership – in short: Kommandite or KG – is one of the so-called complete companies and, as a partnership, is subject to the German Commercial Code (HGB). The formation process for this legal form of company is quite uncomplicated, as it can be formed informally and requires a minimum of only two founding members. It can be formed by both natural persons and legal entities. A maximum number of permissible shareholders is not specified by law.

If all general partners of a KG consist of limited liability companies (GmbH), they form a so-called Gesellschaft mit beschränkter Haftung & Compagnie Kommanditgesellschaft – called GmbH & Co KG for short. Such a GmbH is sometimes also referred to as a general partner GmbH, but beware: the general partner GmbH is a corporation and part of the GmbH & Co KG, while the GmbH & Co KG by virtue of its legal form is always a partnership!

Other typical partnerships:

• Limited partnership (KG)
• General partnership (OHG)
• Limited Liability Company and Compagnie General Partnership(GmbH & Co OHG)

Foundation & Company Name

Two persons are required for the formation of a GmbH & Co KG: The GmbH as full partner – i.e. general partner – and a natural person as partial partner – called limited partner. If you are starting from scratch, you must first establish a limited liability company in preparation. To do this, you need the following in a nutshell: a natural person or legal entity as the founder of the company; a tax identification number (tax ID); the confirmation of registration from the trade office; the shareholders’ agreement aka articles of association together with notarial certification; 25,000 euros in share capital; and finally the entry in the commercial register.

You can find out how the process of setting up a GmbH works in detail here:

• Establishment of a limited liability company (GmbH)

You have successfuly founded your GmbH? The limited partner is ready to go? Then the next step is to set up a limited liability company (Gesellschaft mit beschränkter Haftung & Compagnie Kommanditgesellschaft). Since the GmbH & Co KG is a separate company, you again need a tax ID and must register the company with the trade office. The establishment of articles of association is also mandatory and of course your company needs a suitable company name including the company suffix “GmbH & Co KG”.

Management & power of representation

As a general partner, the GmbH basically has power of representation in the external relationship. However, since a GmbH is a legal entity, the management authority is entrusted to a natural person. This may be a shareholder of the general partner GmbH or the position may be assigned externally to a so-called third-party managing director. In this case, there is often talk of a third party board of directors or external board of directors.

Alternatively, limited partners may also act as managing directors, provided they are expressly appointed to this body. Since limited partners are generally excluded from management, their management authority in this case is, however, limited to the right of objection in the case of extraordinary transactions.

Profit distribution & loss sharing

With regard to the distribution of profits and the sharing of losses, either the statutory principles come into play or corresponding specifications have been anchored in the articles of association. Profits are generally distributed at 4 percent of the capital share plus additional profit “in reasonable proportion”. Losses are also shared appropriately.

It is possible to completely exclude the general partner GmbH from the distribution of profits by means of a declaration in the shareholders’ agreement, whereby higher profits can be distributed to the investors. Insofar as the GmbH has inherent management authority, it can be paid an appropriate remuneration to compensate for its role as managing director, whereby a managing director’s remuneration cannot be deducted in total as a business expense for tax purposes. However, the remuneration is paid irrespective of the profits generated and thereby has the effect, if applicable, that the entire company can save taxes.

General partner, partial partner & tax liability

Usually, the general partners of a limited partnership are liable without limitation and jointly and severally – i.e. with their business assets plus private assets. If, on the other hand, the general partner of a KG appears in the form of a limited liability company (GmbH), he is liable as a legal entity only to the extent of the GmbH’s capital contribution. Limited partners are liable – as in the case of a conventional KG – only to the extent of the mandatory sum that they paid in as a limited partner’s contribution when the GmbH & Co KG was founded.

Like all other legal forms of companies, the Gesellschaft mit beschränkter Haftung & Compagnie Kommanditgesellschaft is generally liable to pay taxes. First and foremost, they are subject to trade tax and – in the case of taxable turnover – turnover tax. A GmbH & Co KG is generally exempt from income tax and corporation tax… However, profit income is still subject to taxation: corporation tax is applied to the profit share of the general partner GmbH, whereas limited partners must pay income tax on their profit.

• Trade tax (GewSt)
• Value added tax (VAT)
• Income tax (ESt)
• Corporate income tax (KSt)

Tip. All taxes for companies in one list:

• Taxes in Germany

GmbH & Co KG – For whom is it worthwhile?

A significant advantage of a GmbH & Co KG is undoubtedly the limitation of liability to the business assets of the general partner GmbH. This means that founders do not directly risk the existence of their company if an investment turns out to be disadvantageous, and they can quickly increase their equity capital through the flexible and simple admission of new limited partners. They can confidently outsource the organisational effort and the management to an outside body or make deviating succession arrangements in order to maintain the GmbH & Co KG.

So who is the GmbH & Co KG suitable for? This legal form is worthwhile for start-ups who would like to set up their business as a partnership without having to forego the special liability restrictions of a GmbH. A GmbH & Co KG is also conceivable as an asset-managing company and for family businesses.

Alternatives to the GmbH & Co KG: Legal forms in Germany

Legal forms – What types of company are there? If you want to start your first company, then choosing the ideal legal form is one of the first steps in the process of setting up a company. Whether it’s a special real estate company or a start-up, I’ve summarized all the types of companies in Germany for you here.

• Legal forms: List

Company types in detail:

• Sole proprietorship
• Registered businessman / registered businesswoman (e. K.)
• Civil law partnership (GbR)
• General partnership (OHG)
• Limited partnership (KG)
• Entrepreneurial company (UG)
• GmbH: Limited liability company
• Real estate GmbH / Asset management GmbH
• Stock corporation (AG)
• Real estate stock corporation (REIT-AG)
• Societas Europaea (SE)
• Foundation / Family Foundation

Der Beitrag GmbH & Co KG – Foundation, Management, Liability & Co erschien zuerst auf ℄ Real Estates.

Additionally, in the following there may be slight grammatical errors, as this article was written by a German tax expert. This does not detract from the quality of information.

Sanierung, Modernisierung or Renovierung? Why?

Further down we explain all the details about things you have to know about renovating or refurbsihing your house or property in Germany. But first, we look at what the terms which you will often hear in the German real estate market even mean. So, what does Sanierung mean?

What is a “Sanierung”?

A Sanierung is an improvement on fundamental issues or problems which make living in a building difficult or very uncomfortable.

In German, there are multiple words for what in other countries may all fall under the term renovation. There are three types of these. First, a Sanierung, which is a very fundamental improvement and update to all things in the house, this means e.g. old sinks may be replaced. The translation of Sanierung is refurbishment. In general this is more effort than just a renovation, as a real issue is fixed. A renovierung is the second type. Here, more aesthetic things like the colour of the walls will be redone. Lastly, a “Modernisierung”. This is, as the word implies, when current state of utilities, walls, etc. are made more modern.

Sanierung is a renovation which fundamentally removes problems in your apartment, house, etc.

This article is part of our guide on German real estate and tax optimization. Learn more here:

• Save Money – Tax Optimization with Property Investments

Sanierung as Effective Increase in Value of your Property

The renovation not only provides a modern look, it also saves energy and thus increases the value of the house. For economic reasons, renovation often makes sense. This is also true if you do not want to sell the house and hope to get a higher sales price by the renovation. Because by the so-called energy renovation you can reduce your additional costs significantly, so that the investment pays off in the long run.

Risk of Damage Decreases: Selling Price Increases

In addition, the premiums for residential building insurance for refurbished houses are significantly lower than for properties without core refurbishment. This is due to the fact that the risk of damage is significantly reduced, so that in many cases more than half of the insurance costs can be saved. If you would like to sell your house and are not sure whether renovation is appropriate, you are welcome to contact us.

Holistic Refurbishment: One-time Expense

When renovating a house, it should always be considered as a whole. Because only extensive renovation leads to better living quality and lower energy costs. For buildings in desolate condition, a core renovation is necessary. In addition, under certain circumstances a roof renovation can become due. This is the only way to create the optimal basis for a renovation. Afterwards, a tight building envelope is produced, which, due to good insulation, ensures that the heating remains in the house.

This also includes the installation of a new heating system, which at least partially uses renewable energies. Multiple glazed windows with good insulation also contribute to a better energy balance.

Modernization and value enhancement at a glance:

• Increase in value through modern appearance
• Energy efficiency and economy
• Higher living quality
• Reduction of additional costs
• Higher selling price

Core Renovation & Roof Renovation

Before you start with the renovation, you should have an expert determine which measures are necessary for your house. Once you have identified the weak points, you can start planning.

Core and roof renovation is by no means necessary for all buildings. However, if you buy a old building, it can happen that you are suddenly faced with this task.

All electrical and water pipes are replaced as part of the core renovation. In many cases, this also includes the complete roof covering. The condition of walls, ceilings, floors, windows and doors is checked extensively. If necessary, these are also renovated. Existing rooms are not destroyed, however. No walls are torn down.

The core of the building remains intact. If inner walls are torn down so that only the outer walls are preserved, this is called gutting.

Property Under Monument Protection

Germany is known for its strict laws protecting monument and historic status of buildings. Special caution is required for buildings that are under monumental protection. In this case, you must contact the responsible office for monument protection and ask for the conditions for core renovation.

Various funding options are available for core renovations, so you can save a lot of money. For example, you can deduct the costs for the craftsmen from your tax return and recoup up to 20 percent of the expenses.

20% craftsmen costs are reimbursed in your tax return

However, the maximum amount for a refund is 1,200 euros. In addition, there is the possibility to take advantage of one of the many support programs for the renovation of old buildings. However, you will usually only be able to benefit from these programs if you decide to carry out an energy-efficient renovation.

The subsidy programs differ from region to region and therefore vary greatly. A certified energy consultant can advise you in this regard and help you find the right program for you.

Maintenance Reserve According to Calculation Regulation

Reading Tip! In our formula collection you will find many more important formulas for the calculation of reserves, yield & Co. calculations and examples for buying, selling and renting. Rent or purchase price multiplier, gross yield, return on equity, property yield, reserves for repairs and much more.

There are too many small hidden costs when buying real estate in Germany to remember. Our guide:

• Hidden Costs when Investing in German Real Estate

Peter’s formula

The Peter’s formula assumes a useful life of 80 years.

The formula means that in a certain time 150% of the pure production costs (building costs without costs of paying for property, development, architect, etc.) for maintenance and reorganization will come up again.

For a House
80 years useful life
150% of production costs for renovation, maintenance

For condominiums in multi-family houses, the assumption is 100%. Distributed to 65% for work on common property and another 35% for work on special property.

For a Condominium
80 years useful life
100% of the manufacturing costs

Reserves Formation

If you calculate further exemplary with an object, whose production costs are 4,500 Euro per square meter, then this results in a monthly reserve of 7.05 Euro per square meter.

Reserve: house
Production costs: 4.500 € / m²
Monthly reserve: 7,05 € / m²

For condominiums, this results in a somewhat lower reserve of 4.50 euros per square meter for the owners’ association.

Reserve: condominium
Production costs: 4.500 € / m²
Monthly reserve: 7,05 € / m²

Tip! These are divided into the aforementioned 65% for work on common property and another 35% for work on special property.

• Reserve for owners’ association: 4.65 / m²
• Reserve apartment owner: 2,40 € / m²

These costs cannot be passed on to the tenant.

Annual reserve according to § 28, paragraph 2

Also the second calculation regulation supplies in § 28, paragraph 2 reference points over the appropriate height of an appropriate maintenance reserve. These cost estimates are significantly lower than those according to the Peter’s formula, but are graduated according to the age of the building (based on production costs of 4,500 euros per square meter):

• Residential buildings which are up to 22 years old = 21,30 € / m² living space
• Residential buildings which are up to 32 years old = 27,00 € / m² living space
• Residential building over 32 years = 34,50 € / m² living space
• Building with elevator + 3,00 € / m²

Energy Renovation: Low Energy Consumption

Energy-efficient refurbishment is the repair of a building with the aim of ensuring the lowest possible energy consumption. If you do an energy update, you save heating costs, contribute to climate protection and can look forward to more living comfort.

This makes sense not only if you want to live in the house yourself, but also if you plan to sell your house.

More and more people are looking for sustainable and energy-saving houses. So you increase your chances on the housing market with an energy-efficient renovation. An important component of energy-efficient renovation is the effective and complete insulation of the building envelope. A continuous airtightness is the top priority here.

Outer Building: Outer Walls, Roof, Front Door, Windows & Co.

The building envelope includes not only the exterior walls, but also the roof, front door, windows and basement ceiling. All these parts shield the living space from the cold outside air. Poor thermal insulation of the building envelope has a catastrophic effect on the energy consumption of the house.

Up to – 50% reduction in energy demand = running costs

In many cases, the need can be reduced by more than 50% by means of an appropriate renovation.

Insulation: Mineral Fibers, Natural Insulating Materials & Co.

Various materials are used for insulation, such as mineral fibers or natural insulating materials, for example cellulose, hemp or cork. The higher the insulation thickness, the more energy can be saved. Leaks and thermal bridges must be avoided at all costs.

An airtight building envelope provides the best savings. With a modern heating system, which is largely powered by renewable energies, you can reduce the ecological footprint of your house and thus contribute to climate protection. At the same time, you can save energy with a new heating system, because most oil and gas heating systems are outdated and have poor efficiencies. Therefore a lot of heating energy is wasted.

Even if you choose a classic heating system that runs on fossil fuels, you may be able to save a lot of money.

Future-Oriented Heating Systems: Heat, Pellet & Co.

However, heating systems that use renewable energy are of course more future-oriented. You have a large selection of different systems. For example, there are heating systems that use solar energy or domestic hot water. Geothermal heating systems are also possible. Pellet heating systems are also considered climate-friendly. Which solution you choose depends not only on your preferences, but also on the individual circumstances. An energy consultant will find the optimal solution for you.

Before the “Sanierung”: Energy Consultation

Before you begin with the energy renovation, you should take an energy consultation. Only with the help of an expert can you get the best out of your house. This is due to the complexity of the topic.

A house is always an overall concept that is influenced by many small changes. These should influence each other as positively as possible. Individual renovation actions that are carried out unprofessionally often do not bring the desired effect or even lead to unexpected additional costs.

Certified Energy Consultants

In order to avoid this problem, let a certified energy consultant help you best. In Germany, these are certified and highly specialized professionals. These experts investigate the condition of the building and develops then together with you a concept for a meaningful and goal-prominent energy counselling.

He not only inspects the building, but also takes your needs into consideration and of course includes the budget in the planning.

In addition, he can point out possibilities to you that you did not even know existed before. If you are looking for a good energy consultant, you can for example contact the chamber of architects of your federal state or search the internet for a suitable expert.

State Subsidies

The German state encourages green energy, and therefore subsidizes it. Just like the energy renovation itself, the costs for the energy consultant can also be supported by subsidies. The Federal Office of Economics and Export Control subsidizes the energy consulting for single and two-family houses as well as for residential units.

• State subsidies – official site of the federal office (in German)

Redevelopment of Old Building

Renovating old buildings – Old buildings are very popular because of their unique structure. Large rooms with high windows and old wooden doors, which may creak a little when opening and closing, stand for a traditional way of life. Many of the buildings are more than one hundred years old. A renovation can give the apartments a new shine. If extensive work is planned both on the façade and the interior, it is advisable to relocate tenants in advance.

For a complete refurbishment, the move-out of tenants is even compulsory. The same applies to owners who, with the support of the owners’ association, have agreed on a renovation in a majority resolution. However, owners who have acquired a property for the first time also like to strive for a renovation of an old building with subsequent new letting. There is a good chance that the renovated apartments will enjoy great popularity in all regions of Germany and will subsequently be rented out at short notice.

Heating System

The topic of heating is not only interesting for building owners, but also for property owners. Heaters are not only necessary in a real estate, but also legally required. What types of heating are there, how do they have to be maintained and are there legal subsidies for the construction of certain types of heating or do the costs have to be paid completely by the owner?

• The whole guide: Heating

Solar heat: Solar Energy

Solar thermal is the process by which solar energy is converted into usable heat. In residential properties, the heat produced is usually used to heat water or for heating. Depending on the location and conditions of the property, this system can completely replace the previously used heating system.

State subsidy of 2,000 euros

Gas Heating: heating with natural gas, liquid gas or biogas

Gas heating is probably the most widespread type of heating in Germany and rightly so, because the system offers many advantages. Modern technology, efficiency and inexpensive offers characterize the gas heating. In addition, they are easy to combine with renewable energies, save space and can be easily installed during modernization and renovation.

Oil Heating: Heating with fuel oil or bio fuel oil

Oil heatings are after gas heatings the probably most frequently occurring systems in Germany. The function mode is simple and works for decades in the same way. The fuel fuel oil is pumped over an oil pipe to the heating system where it is sprayed and burned. The heat that is generated during this process is used to heat up the heating water and thus to heat the house. Most of these components can be found in the boiler, which now takes up little more than one square meter of space and can even be hung on the wall, depending on the model.

Pellet Heating: Ovens with pressed wood residues

A modern pellet heating system is known for low fuel costs as well as for environmentally friendly heating and is therefore one step ahead of conventional gas and oil heating systems. Also the function mode is relatively simple. The wood pellets are periodically delivered to the combustion chamber by means of a feeder, so the correct filling is fully automatic. The heat generated by burning the pellets is used in a separate boiler to heat the water. Thus, both the heating can be operated and the hot water can be produced.

Rental: Laws, Taxes & Tenants

Renting a property can be a great extra income, but it can also become your main job. Landlords have many duties towards the tenant and have to take care of the property. However, if this is successful, a lot of profit can result. We will explain how you can best let your property and how to find the right tenant for you.

There is so much to learn!

The Right Tenants, Suitable Lease & Co.

How do I set the rental price correctly? How does my advertisement appear attractive? And how do I draw up a suitable and fair rental contract? A future landlord asks himself all these questions, because in order to successfuly rent out a property, a lot of knowledge and experience is required. But if you follow a few simple steps, you will make the leap to a successful landlord and profit from the earnings.

In addition come: Landlords have many duties and tasks, among these are for example the organization when changing tenants or the annual preparation of a service charge statement for the tenant. The rent can be set with the help of the local rent index, but it must always be considered whether the region concerned has a rent brake or not. The rental agreement should be fair for both tenant and landlord and should regulate all important points. When choosing the right tenant, it is not only the sympathy effect that counts, but also other important factors, such as creditworthiness – learn everything you need to know about renting your property in our article.

The correct tenants, suitable lease & Co. read on here:

• Leasing out House & Apartment.

Conclusion: Renovate Property

A core renovation brings your property up to date and increases its value at the same time. It increases the comfort of living and in most cases also reduces the energy consumption of the house. As a result, energy costs and the C0² emissions of the house can be reduced. Since in the long run a change to non-fossil fuels from heating systems is inevitable, you can also equip your house for the future. In order to carry out a renovation as effectively as possible, it is essential to seek the advice of an energy expert.

Thinking about buying a house? These are the best methods to save money on your investment

• Saving Money – Tax Optimization on German Real Estate

Der Beitrag Sanierung Meaning Explained – Renovation in German Real Estate Market erschien zuerst auf ℄ Real Estates.

Credit cards – types and uses

The classic credit card got its name from the fact that it granted the customer a loan. Thus, the classic lending of money is only possible with a real credit card. Since a loan always carries risks, you should bear in mind before applying for a classic credit card account that the bank can cancel the account at any time. It is a framework credit, which does not have any notice periods. The will usually make use of this if the customer’s credit rating deteriorates.

The credit is granted as a credit line on the card account. You decide yourself whether you settle the outstanding amount at the billing date in one sum or in monthly instalments. The bank often requires a minimum amount, which is ten or 20 percent of the credit amount used. Alternatively, a minimum payment of ten or 20 euros may be required.

There are so-called black credit cards, which do not have a credit limit. However, these are only issued to customers with a very high income or a very high solvency.

You can increase or reduce the credit limit. Both are possible upon application. You can dispose freely within this limit. This is the advantage of a classic credit card. The limit can be used in full or only in part. Interest is only charged on the amount used and is calculated on a daily basis.

Unlike an instalment loan, the negative balance on the credit card account can be completely cleared at any time in order to save interest. However, you pay for this freedom with an interest rate that is often more than double that of an instalment loan. For this reason, the use of the instalment facility should be weighed up carefully.

Credit cards on credit basis

In addition to the classic credit card, there are other models that, strictly speaking, no longer live up to the name because no credit is granted at all. With these models, however, the credit institutions are accommodating the high acceptance of credit cards. For example, the Girocard or the Maestro card have not yet become established in online retailing. However, most retailers do accept credit cards. If this works on a credit basis, it can also be issued to customers who do not have a high credit rating.

Credit card with link to current account

Many banks offer credit cards that are directly linked to the current account. There are accounts for which a Girocard can be requested as an alternative. Abroad, the Girocard is not known. Within Europe, the Maestro card is used. Modern and young smartphone banks no longer work with the Girocard at all, but only issue credit cards and Maestro cards.

When paying with a credit card linked to the current account, the amount is debited directly. With modern smartphone accounts, this even happens in real time. This means that the amount is immediately reserved in the account. The advantage is that the customer can take advantage of the high acceptance of credit cards and still keep a very good overview of their finances. The credit card’s credit limit is based on the balance on the current account and is constantly updated. Credit cards that are linked to a current account as a means of payment are often issued free of charge.

Prepaid credit cards as an alternative

Prepaid credit cards can only be used as a means of payment if they have been loaded in advance. They are not linked to the current account, but there is a collective account for all customers who have such a credit card with the bank. The transfer must be made to the collective account and assigned to the customer based on the number of his credit card. This can take one or two days. Only then is the credit card ready for use. Another disadvantage is the high fees that have to be paid for the prepaid credit cards. The prepaid credit card should only be applied for if other options are out of the question.

Credit card types with high acceptance in Germany and worldwide

In Germany and Europe, Mastercard and Visa credit cards have a very high acceptance. Mastercard is very often issued in connection with a current account, while Visa is often chosen as a prepaid solution or as a classic credit card.

Those who like to travel to America often, choose American Express or Diners Club. However, both credit cards require a good credit rating. They are usually only issued as a classic credit card linked to a credit account and cost an annual fee, which is not very cheap. Since there are cheaper offers in Europe with Mastercard and Visa, American Express and Diners Club are not so highly frequented in this country. This is also confirmed by the acceptance, which is limited to hotels, restaurants, gas stations and shops that sell high-priced goods.

Der Beitrag Credit cards – credit limit and usage options erschien zuerst auf ℄ Real Estates.