If you hail from a Western country or just somewhere with a less idiosyncratic financial system than Japan, you’re probably used to credit card companies busting down your door to sign you up for that powerful piece of plastic. As a foreigner in Japan, it’s less about choosing a card and more about finding a company that will even give you a card.
Why is it so hard for a foreigner to get a credit card in Japan?
While you may have a solid credit history back home, Japanese credit card companies don’t subscribe to the credit agencies you use back home (they use one called JICC)—and they’re way more conservative. To the credit card companies, you’re a blank slate and possibly a flight risk if you decide to leave Japan without settling your bills.
How are Japan credit cards different from credit cards elsewhere?
Payment in full
In most countries, you can spend money on your credit card and then pay it off as you wish. As long as you pay the minimum amount due, you can defer payment for as long as you like (while incurring interest, of course). However, Japanese credit cards require payment in full the following month.
Typically, for consumer credit cards, the period that the monthly bill covers is from the 16th of a given month until the 15th of the following month. The account summary with the amount owing is sent to the holder by the end of the month. The amount is settled by automatic payment on the 10th of the following month.
For example, for the period August 16th to September 15th, the account summary would be received by the end of September, with the amount automatically withdrawn on October 10th. Since you’re paying in full, no interest is charged.
Choose payment in installments (bunkastsu barai)
While you have to pay the amount of the statement in full, you can choose to split a purchase payment (known as bunkatsu barai) when you buy something. This can be requested on the credit card terminal at the point of sale. You can either pay it all in one go (ikkatsu barai) or you can split it into up to 36 payments.
The higher the number of payments, the more you pay though. The total interest you pay may be between 12% and 16.37% of the total, depending on the card. So if you decide to pay off a JPY 200,000 laptop computer over 24 months, the total amount you pay will end up being around JPY 232,000 (assuming a 16% interest rate).
Revolving payments (ribo barai)
Known as ribo barai, this allows you to split your bill payments if you’d prefer not to pay it all in one go. To do this, you need to request it from your card issuer, and they need to approve you. As with bunkatsu barai, there will be an interest/admin charge to split up your bill payments.
For example, if you owed JPY 120,000 on your statement, you could request to break off JPY 60,000, and pay it off over a period of six months.
Low credit limits
On a regular card (not Gold, Platinum or Black) credit limits are low—often only JPY 100,000 (less than US$1,000). While you can use them for regular payments, shopping online, or eating out, the low credit limit effectively makes them useless for purchasing large items like airline tickets—unless you choose payment in installments.
What are the options?
All banks in Japan have a tie-up with one or more of the big brands: Visa, Mastercard or JCB. Additionally, you can apply directly to JCB or American Express. Visa, Mastercard and JCB are the most widely accepted cards in Japan. Some merchants may refuse American Express because of the higher merchant fees. Outside of Japan, JCB is generally only accepted in places that are frequented by Japanese tourists.
What’s the best way to avoid the rejection and get my hands on some plastic?
As you don’t have a credit record, it’s more than likely you will be rejected. The tips below are not guaranteed to work, but may help. Anecdotal evidence (it’s either super easy or super hard), and the opaque requirements mean that it’s hard to know exactly what will work, or exactly what will trip you up. Again, no guarantees.
Usually required:
- Visa to remain in Japan (not a tourist visa!)
- A Japanese bank account
- An inkan/personal seal (if you used it to open your bank account)
- Proof of address (usually a utility bill) with YOUR NAME on it
- A certificate of employment—and if you were in Japan the previous year, a tax certificate showing income and tax paid
Apparently, these may help:
- Using a (Japanese) driver’s license for ID instead of your residency card (your residency card shows how long you’ve been in Japan).
- Having a spouse visa (i.e., married to a Japanese national) or, even better, permanent residence.
- Providing a fixed line home phone number (this might be out of date).
- Having a full-time job—freelancers, contract workers, part-timers and company owners may be at a disadvantage.
- Living in Japan for a long time.
- Applying for a co-branded card with a mileage program you already have.
- Not applying for lots of cards in succession. Thanks to JICC, any previous failed applications are visible to any companies to which you apply.
- Taking any opportunity for financing—even if you’re just buying a TV. Getting credit and paying it back will establish a credit record.
Anecdotally, Amazon cards, JCB cards, Rakuten and American Express cards have a reputation to be easier to get. The yearly fees for Amex cards seem to be much higher on average though.
The Japanese supermarket giant Aeon has credit cards, which are quite useful if you do your shopping there—you collect Waon points and get discounts on groceries. Other perks include discounts on cinema tickets and JAL air miles. You can apply for a Visa, Mastercard or JCB card, but you have to do it in Japanese. They also have family cards and gold cards, as well as a fuel card tie-up with Cosmo.
Yearly fee or no yearly fee
Regular cards
Many regular cards have a yearly membership fee from the second year. Some of the cards tied to point programs have no yearly fees. The fee for cards with yearly fees range from around JPY 515 to JPY 2,160. An outlier is American Express, with yearly card fees from JPY 7,560 to JPY 12,960 depending on whether it is co-branded or directly through American Express.
Gold cards
Gold cards usually have higher annual fees than regular cards, although the fees can vary a lot depending on the provider. Fees are generally in the range from JPY 1,950 to JPY 10,800. Once again Amex and Diners are outliers with American Express charging between JPY 28,080 and JPY 33,480. The annual cost for a Diners is between JPY 27,000 and JPY 29,160.
What if I need a chargeback on my card?
Although this is only really important if you have a credit card, it’s good to know how it works in Japan.
One of the benefits of a credit card is that when someone doesn’t deliver on a purchase you have made, you can request to have the money returned with a chargeback. Outside Japan, this is usually a relatively easy procedure—you just call the credit card company and ask them to do a chargeback. Unfortunately in Japan, it’s often a difficult process. For example, with SMBC cards, they will ask you to report it as a fraudulent transaction.
As a result, they will cancel your credit card and issue a new card. The transaction will not be removed from your account or from the amount that you owe. Then, after you’ve paid, it will take up to three months for the chargeback to happen. Rather than a credit on your account, the chargeback will be transferred to your bank account.
The only explanation for such a convoluted system is that card companies in Japan are more on the merchant’s side than yours, so discouraging chargebacks must be good for business.
What are the alternatives to a credit card?
OK, so you’ve applied to five different places and they’ve all come back with a no, and they won’t tell you why they’ve rejected you. What do you do now? If you want to join the 20th-century finance world, you still have a few options.
Prepaid credit cards and gift cards
As the name suggests, you either need to pay money onto them first, or buy a gift card with the amount already loaded. Two prepaid cards that we’ve tested ourselves are MobalPay and the Wise card. For more about prepaid cards and gift cards, see our guide to getting prepaid credit cards in Japan.
Debit cards
Debit cards have the functionality of a credit card, but the amount of your purchase is immediately deducted from your bank account. Often they have the added benefit of coming with points and integrating with mobile wallets like Apple Pay and Google Pay.
If you already have a bank account, your current bank is your first logical point of call. All major banks offer debit cards these days, although if you have a SBI Shinsei Bank account, the only way to do this is through their clunky Gaica Card, which requires you to top it up whenever you want to use it.
An alternative to the domestic banks is the international debit card offered by Wise. The other benefit of the Wise account is being able to manage and transfer currencies.
E-money and transport passes
Remember that you can also use a reloadable IC travel card (Suica or Pasmo) for shopping in Japan. Just load it up with money, and then spend the balance at participating brick-and-mortar shops around Japan. Unfortunately, the maximum balance you can store on this card is only 20,000 yen, so you might have to reload your card frequently (with a credit card, you can set your travel pass to top-up automatically, but we’re talking about alternatives to credit cards here!)
See our guide for more on cashless payment methods in Japan.
This post was first published in January 2020. Last updated in July 2021.
