Euro Banking

So this may bore some, but since I am into these kind of things, I thought it would be worth to do a post about European Banking. You would be surprised how different it is from the US. On Friday, I had an appointment to set up my very own Euro account. I was not able to set up an account until I received my tax ID number. And alas, with my Euro account, I could sign up for health insurance and be just a little more Dutch.

ABN Amro it was; as it was still one of the largest banks in Holland I am familiar with. It was fascinating to view the computer screen of our account manager; the old portal I once used when working for LaSalle. The account set-up was far more formal than when Wietse opened his US account. We sat in a big beautiful office with mahogany wood and sipped on our cappuccino as the account manager went through the steps all in English.

From what I was hearing, banking for the consumer is much cheaper than it is in the US. One great finding, in all of Holland, no matter what ATM you use, there are no ATM fees. In fact, ABN Amro expands this across Europe. When I asked to put a deposit into my account, I was told I would have to wait until I received my bank card. There is no such thing as bank tellers and all transactions are done via ATM. As I sat comfortably in my seat thinking how this would affect banks in the US, I wondered if this concept would lose customers. But as I thought further about the long lines I waited in to make a transaction with a teller, I realized that once I was speaking with the teller, the experience was anything but personal. Not to mention, aren't we always in a hurry when we go to the bank? So why not save time and apply those cost-savings to "sans ATM fees"?

I set up a checking and savings account. Savings account are free with no minimum balance. As interest rates are low in Europe and US, I was happy to hear that the savings rate was at a whopping 3%! As well, I was happy to learn that since I have an university degree, I was offerred the "Young Professional Packet" allowing lower fees and better customer service.

Lastly but not least, the most extreme difference I found in European consumer banking is the concept of credit. As Americans, we know the word credit very well. It is a common word even for 18 year olds. However, the perception of credit in Holland is less familar and far less comforting. I first learned of this when I frequent grocery stores and am not only denied the use of credit (I have to use my American Chase bank card as Credit when out of the US), but frowned upon. This happens at grocery stores and gas stations. But even so, if I am at H&M in a big Dutch city (but not known for tourists) and I want to use credit, the experienced employee needs her manager's help to do her First "Credit" transaction. The Dutch people are more familiar with savings than credit. To apply for a credit card in Holland; this is typically done within your Bank. With proof of income, they will find you a card that is directly linked to your bank account. Out of curiosity, I asked what the interest rate was. The account manager replied, "16%, but this doesnt matter as the full amount is swept from your bank account each month, so no interest is applied". My jaw dropped to the desk. You do what? Dutch people only use credit if they have ALL the money in their bank account. Time to time, maybe you do put more on credit, but this is temporary and will soon be paid off with your next paycheck or two.

As you can see, Banking practices in the Netherlands are different in pursuit to match the needs and habits of consumers. Culture plays an important role even in the Banking world.