Credit Card or Debit Card: Which is a better option in Japan?

Getting a credit card in Japan can be very tough

For foreign nationals to apply for a Japanese credit card, s/he must pass the same screening process the Japanese go through.

However, compared to the Japanese, foreign nationals are subject to stricter credit card admission criteria partially because they do not have credit history in Japan. Thus, many of them fail the screening and have difficulty getting a credit card.

Payment cycle specific to Japanese credit cards

In Japan, credit cards usually have a cut-off day and payment day each month.
The amount used up to the cut-off day is accumulated and debited from the bank account on the payment day.

Let’s say the cut-off date is July 15 and the payment day is August 10 for a credit company A. This means that the amount spent up to July 15 is to be debited on August 10 (*1). The amount spent from July 16 to August 15 will be debited on September 10. The same cycle goes on.

In Japan, failure to debit your bank account on the payment date usually results in worsening credit history.

*1 August 10, 2024 is Saturday. The payment will be August 13, the following business day.

How to get a credit card in Japan

Necessary procedures

To get a credit card in Japan, the first thing that you need to do is find a credit card issuing company. Then you will provide your name, address, employment status, and various other information on the card application.

Most of card companies do not provide English language support. The terms and conditions and application forms are only available in Japanese. For this reason, it is necessary to understand Japanese to apply for a credit card in Japan.

Checklist: what you need to get a credit card in Japan

Note: Some credit companies may not require all of the items listed above.

Credit card screening

Although credit card applications by foreign nationals go through the same screening process as that of Japanese, they may not be accepted or result in the lower credit limit than expected.

Time required for screening

It usually takes about two weeks to review the application, process the screening, and issue a credit card when you submit your application by post.

If your application is not granted, you may try another card company. But re-applying is usually regarded negatively by card companies.

Credit card companies will not disclose the reason of screening. All credit companies have unique criteria for determining credit risk of each applicant.

When you really need a credit card, you may want to look for another option.

Struggled with the credit card application? Try a debit card

For foreign nationals who are struggling to get a credit card, a debit card can be the best alternative option.

Debit cards have almost the same functions as credit cards and can be used in Japan just like ordinary credit cards. In addition, unlike credit cards, debit cards are issued with no screening, in principle.

Debit cards with international brands such as Visa and Mastercard can also be used outside Japan. When traveling abroad or temporarily returning home, they will become your good companion.

The difference between credit cards and debit cards

Credit cards are issued by credit card issuers, which are considered money lending business in Japan. Meanwhile, debit cards are issued by banks and they are linked directly to your bank account.

Credit cards in Japan have a cut-off day, and the amount spent are direct debited from a bank account every month on the specified day. When you use a debit card, on the other hand, the amount spent is immediately deducted from your bank account.

Debit cards can be used almost the exactly the same way as credit cards as long as the amount is within the bank account balance and spending limit, making your life easy in a cashless society. Better yet, it still gives you an option to withdraw cash from ATMs when necessary.

How to get a debit card in Japan

In general, the process for getting a debit card in Japan is the same as in your home country. You must have a bank account and request the bank to issue a debit card.

Please note that most banks in Japan require that you have been in Japan for at least 6 months to meet the residency requirements for opening a bank account.

Not all banks in Japan offer debit cards. Make sure to check in advance whether the bank issues debit cards before opening an account.

Pros and cons of debit cards

Pros of debit cards

No screening, no credit history required

As stated previously, credit card screening involves an examination of income and occupation for post-payment.

Debit cards, on the other hand, are issued upon an application because of the unnecessity of the screening process.

In other words, debit cards can be the solution for those who have been struggling with credit card screening, as long as they meet the requirements for opening a Japanese bank account.

Can use it like a credit card

Debit cards are generally offered by international brands such as Visa and Mastercard. As such, they can be used at merchants and restaurants as well as for online shopping where credit cards are accepted.

No need to worry about overspending

Credit cards offer installment payments and cash advance services that can be used up to the credit limit. While this is convenient, you may not receive a warning for spending more than your account balance, and you may receive a large bill than you expect. In case your bill ends up unpaid, additional fee will be charged, hurting your credit history.

Debit cards, meanwhile, cannot be used if your bank account balance is insufficient.

So, debit cards can be a great tool for those who are concerned about overspending, as they feel the pain of spending beyond their limits right away.

Furthermore, many of them offer self-control function of the spending limit. Maintaining the limit gives you an option to save monthly spending.

Save ATM fees

Debit cards can be used just like cash payments, without the hassle of withdrawing cash from an ATM or the need to charge the card in advance. You hardly need to withdraw cash from an ATM, saving ATM fees a big time in the long run.

Cons of debit cards

May not be used for some payments

Debit cards may not be used for certain payments such as offline payments (e.g. expressway tolls), payments for which the settlement amount is fixed after the confirmation of card validity (e.g. gas stations), and recurring payments (e.g. utility bills, telephone charges) in Japan.

Installment and revolving payments are not supported

Debit cards are used in much the same way as credit cards. However, they do not support installment or revolving payments like credit cards. The fact that debit cards do not have a credit line like credit cards is a disadvantage.

On the other hand, as mentioned earlier, the advantage of debit cards is that they can be used only within the balance of the account, preventing overspending.

Which debit card is good for foreign nationals living in Japan?

Having listed pros and cons of debit cards, which debit card is convenient for foreign nationals living in Japan who use a debit card on the daily basis, travel within Japan and abroad or return to their home country on vacation?

Offered by an international brand

In Japan, two major types of debit cards are available: international brands such as Visa and Mastercard, or J-Debit which is unique to Japan.

Choose a debit card provided by an international brand if you intend to use it both in and outside of Japan including online shopping/payments.

Available in both yen and foreign currency

There are a number of types of debit cards offered by international brands in Japan, but the most common are those that are linked only to yen deposits in a bank account. When you use these types of debit cards outside of Japan, the amount you pay will be deducted from your yen deposit, even if you have a foreign currency deposit.

Some debit cards, however, are also linked to foreign currency deposits in your bank account. When you use this type of debit card outside of Japan, the amount you spend will be deducted from your foreign currency deposit.

GLOBAL PASS fulfills your needs

If you are looking for a debit card to use in Japan and abroad, GLOBAL PASS is the debit card for you.

What is GLOBAL PASS?

GLOBAL PASS (Multi Currencies Visa Debit with Cash Card) is a Visa debit card issued by SMBC Trust Bank PRESTIA.

GLOBAL PASS is linked to Yen and foreign currency deposits in your bank account and can be paid in 17 foreign currencies in addition to Japanese yen for shopping and cash withdrawals. Whether you are in Japan or overseas, GLOBAL PASS will be your good companion.

Shopping

Compatible with iD (*2) and Visa, you can make purchases in Japan and overseas, often by tap to pay.

Cash withdrawal at ATMs

GLOBAL PASS also functions as a cash card. In Japan, you can deposit and withdraw cash at ATMs such as Sumitomo Mitsui Banking Corporation, Japan Post Bank, and Seven Bank, as well as SMBC Trust Bank PRESTIA (*3).

And when you need cash outside of Japan, you can withdraw its local currencies at ATMs marked with Visa or PLUS in over 200 countries and regions worldwide with no overseas ATM fees (*4).

*2 iD is available in Japan only.

*3 FREE withdrawals / deposits at Sumitomo Mitsui Banking Corporation ATMs.

*4 No overseas ATM fees are charged, but ATM owner fees may apply.

Comprehensive English Support

SMBC Trust Bank PRESTIA offers comprehensive English language support.
The following services are all provided in English.

Family Cards

You can apply for up to two family cards of GLOBAL PASS.
Functions and services are the same as the primary card.

Notes:
There is a fee to issue family cards.
Family cards can only be issued to family members such as your spouse and children who are the age 16 years or above (or high school students).

Alert service

Register for PRESTIA Alert Service to receive e-mail alerts.

PRESTIA Alert Service helps you recognize when there has been unauthorized use.
This function becomes very handy when you issue a family card for your children who will be / are studying abroad for each, for each card usage can be notified to your e-mail address.