Friday, August 19, 2011

Credit Card Guide #2: Application Pointers

Some of you veteran expats may have heard that getting a credit card as a foreigner is near impossible in Japan. 

Unfortunately that is not too far from the truth. However, there are various ways to increase your chances for approval. 

Read on...

Like any financial product, getting a Japanese credit card requires wading through paperwork. The following are essential:
  • A valid resident status in Japan and alien registration card (since 2012: a zairyuu card) or driver's license
  • A Japanese bank account
  • An inkan (印鑑), the same one you use for your regular bank account
  • Tax forms, salary slips, and/or utility receipts (not required for all applications)
  • A student ID from a domestic university or vocational school (if you are applying as a student)
Choosing a Card
Credit cards are becoming more standard in Japan and these days just about every major supermarket, airline, and shopping mall has their own branded card with all sorts of points, perks, and goodies attached to it. Banks, of course, also offer their own.

Many department stores have tables were you can sign up on the spot (provided you have ID and an inkan on you) and just about every retailer has card applications on its website. However, if you apply online you will still have to fill out a form from the credit card company and present a valid ID copy.

Pointers for the Application Process
You may have heard horror stories of foreigners getting rejected purely on the basis of their foreignness. Unfortunately, there is a legal precedent in Japan for rejecting foreigners without permanent residence for financial products due to their potential flight risk. Yes, it is unfair and it sucks.

When you apply for a credit card, the card issuer will do a credit check. The Japan Credit Information Reference Center Corp acts as a central clearing house for consumer credit data for all big banks and card issuers generally check this organization first to see if you have outstanding loans, missed payments, or other financial obligations. 

What sort of credit reporting goes on here isn't exactly clear but it only involves your Japanese credit lines, so if you haven't been in Japan long then your shouldn't have anything to worry about. (...except, it seems that not having any credit history whatsoever can also act against your application.)

Some of the following factors affect your Japanese credit worthiness:
  • Having a home phone number - it may sound silly, but having a home number in addition to a mobile phone is seen as a big plus on credit applications since it indicates you intend to stay in the same place for a while. And don't try using a Skype number (anything starting with 050) since the dialing prefix will give it away.
  • Living in the same place - almost every application will ask how long you have lived in your current residence and what type of housing it is. People who live in a rental unit and have just hopped off the plane or changed locations are considered bigger credit risks. It pays to settle down for some time before applying for a card.
  • Working for a private company or on a short-term contract - many foreigners in Japan who teach at schools actually technically work for hakengaisha (派 遣会社), or dispatch firms like Interac. Eikaiwa teachers, and even many jobs of non-Japanese workers outside the teaching profession are often contract-based, meaning a termination date (disregarding the possibility of renewal) is built into the job. Japanese financial institutions tend to view this form of employment as a risk since this kind of worker can be fired more easily than seishain workers (or the job can simply end if the employer chooses not to renew the contract) and often doesn't have any unemployment benefits.
  • Permanent Residency/Spousal Visas - Those who have PR will have a much easier time getting credit due to the fact that they are not seen as a flight risk. Plus, if you are married to a national then you can have your wife apply for you and get a family credit card.

Things to avoid when applying:
  • Big Banks - Banks in Japan are big credit card issuers but they are very, very conservative with their credit portfolios. Even if you have been banking with them for ages, there is a good chance you could face rejection just based on your foreignness. Try for an independent credit card issuer instead.
  • Alien Card - Most foreigners use the Alien Card (Now Zairyuu Card) as their primary form of ID. However, this card contains the length of your residence status in Japan. If you only have a one year visa, this might be considered a turn-off to potential issuers. Try using a driver's license, insurance certificate or other valid ID with your application instead.
  • Lying - Don't fib on the application. Japanese card issuers often call your home phone to verify if you live at the residence stated, then call you at work (or your boss) to make sure your job and salary information is in order. Some card companies might even ask you to present proof of income like a tax form or salary slip.
  • Applying for Multiple Cards in Short Order - Avoid applying for half a dozen cards all in a row. Banks can see your past applications and having a lot of rejections and outstanding applications dings your credit eligibility. If rejected, cool your heels and wait for a bit.
  • Big Name Cards - Certain cards such as American Express and some department store credit cards cater to wealthy clientele so it is best to avoid them all together. However, as one commenter points out below, if you have a long-standing relationship with AmEx at home, you might be able to have your card transferred to a domestic Japanese account by talking to US-side customer service. That exception aside, JCB-branded cards have a reputation for being easier to get than Visa and MasterCard brands, so try them first. 
Finally, if you are a student, don't forget to check and see if your university has a deal with a card issuer. The University Co-op Association seems to have a deal worked out with Mitsui-Sumitomo Card Co. for a student-only credit card that is relatively foreigner friendly. Other card issuers have similar student cards if you have a valid student ID. While these are not a sure bet either, they're not a bad place to start if you are currently a student.

The whole application process may seem very intimidating, but once you know the basics, identifying cards you're likely to get accepted for and preparing subsequent applications gets easier. Don't get frustrated if you get rejected a few times and don't let anyone tell you foreigners can't get credit cards here (every AccessJ writer has been able to, after arduous work, been able to get one, and we all did it under different circumstances and through quite different routes). 

Check back soon for our next installment, where we will show you how to fill out a model application. 


  1. If you already have a credit card from your home country, they should still take it like any other card right?

  2. Anon--Yes that shouldn't be an issue. I have only ran into credit card trouble when using debit cards but that was a few years back and limited to one or two chains. But if you want to be sure, double check with your bank to make sure there are no restrictions or penalties for overseas use. Many card issuers tack on a curency conversion fee (usually measured as a percent of the total transaction) plus having to deal with monetary conversion can be a headache.

  3. Well, with regards to American Express, if you have one from home then try a Global Transfer first. They may cater to a more high-end clientele in Japan but if you've got a positive history with them it's probably easier to try and carry that over than to start fresh.

  4. "their is a legal president"

    ...should read "there is a legal precedent."

  5. Thanks Anonymous, I'm sure Dan will appreciate the correction.

    Incidentally, if anyone wants to donate some free time, an AccessJ proof-reader would be a great help!

  6. Try Rakuten card

  7. Applied online for the Rakuten card as a JET (public servant) on their application) with 19 months same employer & residence history. It was rather amusing how they never even bothered to actually call to perform their 本人確認 check for Step 3 of the application process. Was just rejected out of hand.

    It seems they have bots or Japanese employees posting links all over pages of this sort, and while their English application walkthrough is quite nice most folks will have to look elsewhere.

  8. There seems to little rhyme or reason for credit card rejections. I suspect most of the process is automated, especially when it comes to checking a credit history.

    Ironically enough, most companies will just flat out reject you if you don't have a credit history (which begs the question of how you will get one in the first place). If you get as far as the 本人確認, it usually means that the company is going to accept you.

    I recommend Mitsui-Sumitomo Card Corp. I have always had good luck with them.

  9. I got my first acceptance from Yucho/JP Bank. It's a JCB card that doesn't necessarily need to be tied to a JP Bank account, but which JP Bank advertises. It's called the JCB CARD EXTAGE:

    One of the application requirements is that you must be 29 years or younger. It specifically targets young professionals without an established credit history.

  10. Has anyone come across credit cards in Japan that you can sign up for with an initial deposit? I signed up for such a card when I was expat in the US years ago, it enabled me to build credit history there and subsequently get more cards. The system was simple :pay $500 deposit = your credit limit is $500. After a year or so, if you had made your payments on time and have no unpaid bills on your record, you line was increased. Eventually, you even received your deposit back.

  11. I don't think Japan has the same sort of FICO-based credit building system as Japan. Companies seem to put much more emphasis on employment status, stability and so on.

    Also, keep in mind that credit cards are often used like debit cards are in other countries. Rather than keeping a revolving balance, most people opt to pay in full at the end of a billing cycle.

    Instead, most companies have cards targeted at certain groups such as students, people under 30 and so. Also, credit criteria varies drastically from company to company, so you might have to try a few times before you get lucky.