Choosing a Credit Card in Israel

Choosing a Credit Card in Israel

The first thing to note about credit cards in Israel, is that most of them are actually “charge cards” (also known as “deferred debit” in some countries) – a bit similar to a debit card, but your charge will occur ONCE a month, usually on the second day of the NEXT month. (So, for example, all your credit card purchases in April, will be charged from your bank account on May 2nd).

So basically, you get up to one month’s credit, WITHOUT any interest. This, in my opinion (as a Dave Ramsey fan) actually better than the typical American revolving-credit card, in which your purchases are automatically turned into interest-accruing credit.

You CAN get “traditional” revolving credit cards in Israel, under names like “Visa Multi” or “Isracard More”, in which you can choose how much to pay every month – while the rest is transferred to an interest accruing “basket”. My advice to you – DON’T use these cards, they will only get you in debt that much faster.

  • Important Tip: The credit card benefits and special sales and discounts in Israel are quite mediocre. If you’re used to generous cash-back plans, worthwhile reward points and deep discounts, be prepared to be disappointed. Most of the deals you get are 1+1 deals for various attractions, usually family and children related.

The Israeli credit card companies are owned by the major banks. Therefore, each bank that owns a credit card company will try to push you towards their brand. So if you have an account with Bank Hapoalim, for example, they will issue you an Isracard card (the local Mastercard brand).

The credit card companies also issue “external” cards – external to your bank account, that is. It’s important to distinguish between these two types of credit cards:

  • “Internal” cards controlled by your bank: These are cards issued by your bank and your branch. They will either be from the credit company owned by your bank, or the one they’re in business with. Internal cards are “controlled” by your bank – your branch will determine your credit limit, and will be responsible for your charges. (Plus, the bank gets a certain percentage from all your payments, from the merchants you’ve paid – along with the actual credit card company).
  • “External” Cards – These are cards issued directly by the credit card company, without any direct involvement from your bank. The credit card company will be the one determining your credit limit.

Choosing a Credit Card in Israel

So, should you get an internal or external card? Credit card companies are usually willing to issue external cards to customers that already have another card (either internal or external). If you’re new here, and don’t have any cards – they might not give you one. So your first bet would be to get a card from your bank – and then you can easily get external ones.

  • Important Tip: Most credit cards in Israel incur a monthly “usage” fee. Yes – the credit card company expects you to pay them for the “privilege” of helping them earn more money. These monthly fees can go anywhere from 9 to 22 shekels per month. However – with some haggling, you can EASILY demand to cancel these fees. It’s a bit easier with “external” cards – Just threaten to cancel the card, and in most cases they’ll immediately offer to cancel the monthly fee. In addition, some club cards are free from the get go – but usually only for a pre-determined period (often one or two years).

These are the major credit card brands available in Israel:

 1. Leumi Card

  • Leumi Card’s website (Hebrew only)
  • Customer Service number: 03-6178800
  • Sales number (for new cards): 1-700-700-798

Owned by Bank Leumi, Leumicard offers both VISA and Mastercard cards. If you’re a Bank Leumi customer, you will get an “internal” branch-connected card. If you belong to a different bank, you can get an external Leumicard card, through one of their many club cards (Such as the Shufersal card, Azrieli malls card, and others).

Basic Monthly Fee: 12.90 shekels. With most of the club cards you can get the first year (or two) for free. With some easy haggling and cancellation threats, you can keep the free status indefinitely.

Rewards Program: An assortment of 1+1 deals that change every month – Movie tickets, water parks, (expensive) breakfasts, and more. To get a deal, you have to spend 1,500 Shekels with the card. (3,000 shekels for 2 deals, 4,500 for three, etc’). This will go up to 2,000 shekels on November 2014.

2. Visa CAL

Owned by two banks – Discount and Fibi (“HaBenleumi”). If you’re their customer, you’ll get an internal branch-connected card, otherwise you can get an external one, usually through one of their club cards.Visa CAL offers Visa, Mastercard and Diners cards.

Basic Monthly Fee: 12.90 shekels. With some of the clubs, you can get between 1 and 3 years for free. With some haggling, you can keep it free indefinitely.

Rewards Program: A mostly useless (in my opinion) mish-mash of 1+1 children’s attractions, cheap tickets to the Habima theater, and a single “special” monthly deal that changes every month. If you have children, or happen to catch a useful (for you) monthly deal, you might find a good discount. Otherwise, don’t expect to get a lot from them.

3. Isracard

Owned by Bank Hapoalim. If you’re their customer, you’ll get a an “internal”, branch-connected card. Otherwise, you can get an “external” one, usually through one of their club cards. Isracard offers Mastercard and Visa cards.

Basic Monthly Fee: 17.37 shekels. With some of the clubs, you can get between 1 and 3 years for free. With some haggling, you can keep it free indefinitely.

Rewards Program: A confusing program, which divides the rewards into 7 groups. You have to choose 3 groups in advance, and can only pick a deal from one of your 3 groups. (You can change your selection once a month). The deals themselves vary between 1+1 deals, mediocre discounts to events, and more. Ever since this program was launched, I think I only used it once, to get a 1+1 movie ticket.

4. American Express

Owned by Bank Hapoalim, it is closely connected with the Isracard brand, and shares some of the customer support staff. On some of the banks you can get an “internal” branch-connected cards, and on others you’ll get an “external” card. They offer the various Amex colors – a Green card, Gold, and Platinum.

Basic Monthly Fee: 13.28-22.48 shekels, depending on your card. Platinus is 27$. You can get the card for free with some of the club cards, for 2-3 years, and then with some haggling you can prolong the free period.

Rewards Program: This is probably the most annoying rewards program among the Israeli cards, because of the direct comparison you can make with the American/UK Amex rewards programs. The bottom line: you have to spend A LOT more (than the us/uk equivalent) to get a single point, and those points are worth a lot LESS than in other countries. Not only that, but the selection of “rewards with points” you can choose from is very limited.

  • Important Tip: Golden cards hardly mean anything these days, among ALL the Israeli credit card companies. They throw them around like candy, and the benefits are close to non-existent, so don’t let the banker try to impress you with a “Gold” card. Even Platinum cards aren’t worth much these days.

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