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FRANKFURT, Germany -- For a few fleeting months last year, Richard Klein binged on furniture and a fancy stereo -- thanks to his newly acquired credit card.

"But then the bill came, and the money was gone," Klein said. He tossed out the card after his bout with debt, concluding, "It's better to keep track of what I've bought."

Despite record-low interest rates and a credit spree sweeping across Europe, Germans are shunning the lure of credit cards.

"The Germans have a different consumption mentality: They don't get into debt," said Hubertus Pellengahr of the German Retail Association in Berlin.

Throughout Europe, credit cards have changed people's habits over the last decade. England has the most developed credit card market in the world after the United States, which has more credit cards than people. There and in France, people are used to dipping into the red to pay their bills. Credit cards have also been making great strides in Hungary since their introduction in 1999.

Not so in Germany. The German Retail Association estimates that credit cards are responsible for only 5 percent of goods purchased here annually, compared with 13 percent around the globe. It's not that Germans don't like plastic cards. But Germans use them mainly to substitute cash, not for long-term borrowing.

"When I want something, I pay for it myself," said David Hausen, a senior in high school. "It's a question of honor."

RELUCTANCE ROOTED IN HISTORY

The unpopularity of credit cards is rooted in pragmatism. Unlike debit cards, which are free, credit cards are viewed as expensive -- both for shopkeepers and customers.

The only retail stores to make a profit in Germany -- Aldi and Lidl -- accept only cash or debit cards. The discount stores have kept ahead thanks to a strategy based on speed and low costs, experts say.

"At Aldi, everything has to go fast," said Kerstin Aldendorf of the German Association of Banks in Hamburg. Credit cards would postpone the arrival of money into Aldi's coffers, lessening its competitive advantages.

This reluctance to borrow is also rooted in history. The great inflation of the 1920s, when prices doubled in a day and the middle class saw their savings wiped out, instilled in many Germans deep caution toward borrowing money.

# posted by Medical Information : 2:33 AM