There have been a few posts here discussing using credit cards in Israel. Obviously, if you are reading this blog you are active and will hopefully know that when using an American Credit Card in Israel you need to be aware that many if not most US Credit Cards add Foreign transaction fees, this may also be called an international fee. These foreign transaction fees are typically around 3% of the purchase. So if you spent, say, $500 a month on groceries here in Israel, the extra fees might cost you another $15
The good news is that there are many options of credit cards available that have no foreign transaction fees. Some credit card issuers, like Capital One, waive foreign transaction fees on all their cards. So read the post here (https://liveyourbil.com/which-credit-cards-have-no-annual-fee-and-no-foreign-transaction-fees/) if you want more information about a US credit card. Just to be clear these are US Dollar based credit cards. So what happens when you make a charge is that the credit card will charge you the current dollar to shekel rate that they pay and convert the amount that you are paying into dollars.
Using a US Credit card in Israel has many advantages ( see https://liveyourbil.com/credit-cards/) and especially if you have money coming in or income in US Dollars then that is definitely the best option.
That being said there are more and more industries that can give you a problem with using a foreign credit card. For example, The Iriya in Jerusalem, as well as the Israeli government websites do not accept most foreign credit cards.
Another reason to get an Israel (Shekel) based Credit Card is Tashlumim (Payments). This is a common option when you are paying, they will ask if you would like to do “Tahlumim.” This is an option of paying a bill over the course of several months (up to 24 months in some cases) interest-free, which may be of interest to many people/
So this post will go through the options to get an Israeli Credit Card.
Option One – Through your Bank – Generally, credit cards are issued by Israeli banks, so if you have an Israeli Bank account at any of the major banks, you can ask for a credit card to be added to the account. It is important to remember that these “Credit” cards, like almost all credit cards in Israel are really debit cards and are linked and preapproved to automatically withdrawn/debited from your checking account once every month the full outstanding balance. The good news is that these credit cards can be granted by any banker, and there is no need to get it “approved, which can be problematic for Americans. The bad news is that there are almost always monthly fees with these cards. These fees are usually between 10-15 shekel a month. It is possible to get these fees waived or at least cut them in half. However that takes a trip to the bank, talking to a banker, and as with anything, no guarantees. This credit card most times can also be used as an ATM card (Caspomat Card) to take money out of The bank’s ATM machine.
Option Two – Through a Store – There is another option, which is to open a credit card not connected to your bank account. For example, if you live in Ramat Eshkol, you may have seen months in which a local supermarket “Yesh” is pushing people to sign up. (https://www.cal-online.co.il/cards/yesh/) These are relatively easy cards to apply for, and while it does need to be “approved” most people have no issues with successfully signing up.
Benefits: These credit cards are, many weeks, needed in order to access weekly sale prices on various items, as well as usually having the first year free, a slightly lower monthly fee and many people have had success calling over the phone and getting these fees waived consistently year after year.
Option Three – כזה אני רוצה – In 2019 Max credit card company was spun off from Leumi to become its own company. There are many options of unique credit cards that one can sign up for, but one that we can recommend. The only current free option for an Israeli credit card is the כזה אני רוצה Executive Max Card. This Credit Card needs to be approved and is therefore currently only available to Israeli citizens with a Tuedat Zehut. (https://www.max.co.il/cards/card/2867).
In order to be eligible for this card you need to A) Have a Tuedat Zehut and B) Have another Israeli Credit Card. C) Be a member of the כזה אני רוצה Facebook group (https://www.facebook.com/groups/INeedItIL)
So for those out there who, either husband or wife, has a Tuedat Zehut and a credit card that you are paying a monthly fee for. Join the Facebook group, apply for this free credit card, and then you can cancel the old one with the monthly fee.
Final Important Point! If you use your current bank-issued credit card as an ATM card, you MUST order a regular ATM card for your bank before cancelling that credit card as otherwise, you will have no ability to take cash out of the bank. Regular (non- Credit Card ATM cards are available from all banks for no fee, however, they do not usually offer it, as they make money from their monthly credit card fees.