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Greece — Paying By Cash Or Credit Card — How To Decide What To Do

Consider asking vendors whether they accept credit cards or not before you order services

July 15, 2016

Bargaining for cash — common in Greece …

If you travel full-time like we do, or just travel a lot, you probably use your credit cards to document your expenses and pay them on a monthly billing cycle. This is a smart business practice. We also prefer to hang onto our cash when we travel. We know from experience it's easy to get caught in cash only situations around the world.

If you travel to Greece, consider asking vendors whether they accept credit cards or not before you order services, EVEN IF the entrances to their establishments and their websites bear the uniform credit card logos. Why?

We're in Greece now. When we attempt to pay by card, some vendors tell us their credit card machine “is broken”. Others perform an electronic kabuki dance to cause the machine to spit out random characters as proof of their problem. We notice this with hoteliers, restaurants, and other vendors.

We notice if we book a room over the Net via a service such as booking.com, a service provider will accept our first payment via card — largely because the transaction goes through their bank and is trackable. This money is available to the owner to make payments by bank transfer for anything he or she wishes. But if we attempt to extend a rental of a room, rental car, etc., without booking over the Net, we find vendors claim their machine “is broken”, or “they've ordered a new machine”, as they attempt to negotiate payment in cash. They want to take the transaction “off net”.

What residents of Greece are upset about are the capital controls on cash transactions. Account holders are subject to a 60 Euro per day cash withdrawal limit imposed by the Government via the European Union. We’re told this country's Euro creditors set up long term repayment cycles up to 99 years backed by property guarantees. Businesses take in revenue and the banks, via the Greek Government have clamped down on business transactions. Business owners tell us the current conditions place a severe constraint on their cash flow.

We've interviewed a number of business owners in Greece. Their comments are consistent: they cannot withdraw more than 420 Euro's per week, or 60 Euro's per day. This applies to a person, individually, and any businesses they run. A business owner is not entitled to take out an additional 420 Euro's per week separately for each business he or she operates. There is no intermixing of definitions for business and individual persons. The limit is 60 Euro's per day. No doubt, this situation is difficult, especially for those who are honest and do not exploit the system.

The focus is on cash control in Greece, so much so, that, I'm told, Government is clamping down on all cash transactions between residents. Say, for example, a resident wants to buy a motorbike for 500 Euro's from another person in a private sale. The controls are set up to force the disclosure of the cash transaction and to force payment via bank transfer even if the buyer (a resident) has cash in hand.

Residents of Greece running businesses have, from their perspective, no incentive to deposit money into the banking system. Because no matter how much money they have in their accounts, they are subject to the 420 Euro cash withdrawal limit per week. The premise is, that if an individual needs to pay for something personally or in the name of a business, he or she can do so via bank transfer.

We’ve noticed this phenomenon all over Greece over the past year.

What Does This Mean For You — The Traveler?

Our concern focuses on the needs of the travelers we write for here and elsewhere and who depend on accurate reporting to make their travel decisions. Tourists and business people need to plan their expenses. They need to know when they need all cash to do business and when they can use credit cards.

From what we have seen in Greece over the past month (May-June 2016), travelers should carry enough cash to pay for services for two or three days. And always keep an eye out for ATM's and check them out to make sure they are working, especially in remote areas and the less popular islands.

Thus far, our experience reveals the higher end hotels, popular restaurants, and major gas stations, will and do accept credit cards consistently. But we're finding more businesses everyday that advertise they accept credit cards when in fact, they are all cash only business, EVEN IF, they display the internationally known brand credit card logos on the entrances to their businesses and on their websites.

Displaying these logos and affirmative statements about credit card acceptance on websites and NOT accepting them is a deceptive business practice.

It's to the advantage of businesses to do as little business as possible via credit cards given the circumstances. We understand that. But that is not our problem as travelers — after all — we can and will go somewhere else.

If you plan on traveling to the more remote areas of Greece, but find yourself at the airport in Athens first, consider exchanging cash there. Right now, exchange agents are offering a 50% reduction in the exchange fee for transactions $500 and above (although we cannot cite the rates as favorable for various reasons).

None of this matters overall. As travelers, we'll pay for the services we receive either way. But if you're like us, and plan your expenditures so that you can pay your bills on a monthly cycle to maintain your cash flow while you travel, you'll find this “cash demand” approach disruptive.

So, what's the upshot for you, the traveler?

Don’t let anything stated here scare you off from traveling to Greece. The country has undergone monetary crises since my initial visit here in 1970. The current crisis is particularly severe. But it is still a great place to visit and live even though costs for services and food are now on par with the US and Europe.
Ask about credit card acceptance before you order services. Often, you'll notice service providers offer lower rates if you pay in cash. This may be to your advantage if you're willing to negotiate.
Bring cash and exchange what you can (see above) at a favorable rate.

What say you, our associate rovers and wanderers of the world? Let us know your thoughts!

Happy roving! We hope to see you here in Greece or elsewhere.

Tom, for RoverTreks