The winds of change have blown in cash-dominant Japan bringing with it the advent of credit cards. Indeed, within the cities of Japan, the future of a cashless lifestyle - armed only with a smartphone and my cards, is not as distant as it used to be.
Table of Contents
- Increased Acceptance of Credit Cards in Japan
- Recommended Credit Cards for Foreign Residents
- Applying for a Credit Card
- Summary
Increased Acceptance of Credit Cards in Japan
As the usage of credit cards increases, stores adapt accordingly leading to mass acceptance of credit card transactions especially in cities and tourist areas. It can be said that there are more stores taking credit cards than not or at the very least cash alternative payments.
According to specialist market data, Statista, around 293 million credit cards have been issued in Japan as of March 2020, an increase of over 9 million from last year. This was confirmed by the Japan Consumer Credit Association’s statistics, who also stated that on average every Japanese adult citizen owns 2 to 3 credit cards!
※ Statista, "Number of credit cards issued in Japan from 2014 to 2020" ※ Japan Consumer Credit Association, "Credit card statistics"
Japan Credit Cards vs Overseas Credit Cards
There are some key differences between Japan credit cards and overseas ones which will be explained below.
Settlements
Most countries run a revolving credit system - initiate payment in an amount of your choosing, the outstanding amount will incur interest and be carried forward to the next month. In Japan, there is a default system - the credit card company debits the amount due from your bank account on a specified day usually on the 10th or 26th day of the month. If you want to use the revolving credit system in Japan, you will have to apply for it.
Bunkatsu Barai 分割払い
Or installments. You’ve probably experienced this when paying via credit card in stores.
The cashier will ask, “Is one-time payment alright? Oshiharai ha ikkatsu de yoroshii desyouka? お支払いは一括でよろしいでしょうか？”
At this point you can answer yes to proceed with a one-time payment, or ask for Bunkatsu Barai. The cashier will follow-up asking how many installments. Generally 2 installments are interest free, with interest charged from 3 installments and onwards.
Bonus Barai ボーナス払い
As the name implies, credit card settlements are paid using your bonus. In Japan, it is possible to arrange your credit card settlement to coincide with your company's bonus payment schedule. This is especially useful for expensive purchases. Generally Japanese companies pay bonuses 2 times a year. For most credit card companies, 1 time Bonus Barai is interest free, whilst 2 time Bonus Barai will be charged interest.
Difficulties Foreigners Face when Acquiring a Credit Card
Signing up for a credit card as a foreigner can be difficult with challenges like language barrier, lack of familiarity with the system, and even being rejected without knowing why. Here are some factors to consider that will affect approval of your credit card signup.
Factors to Ease Credit Card Signups
Employment Status and Condition
Being a full-time employee is assuring to the credit card company that you will be staying long term and have a stable income as opposed to being a freelancer or part time worker.
Annual Salary
An amount that can support your spendings.
Credit Record
Having a good credit record will increase your chances. Note that your overseas credit record no matter how good it is will be of no help.
Resident Status and Length of Stay
Generally, only long term residents can apply for credit cards. Having permanent resident status or married with a spouse living in Japan is helpful.
Students, although a long term resident, staying only 1 year will usually have little chance due to the short duration. For students studying in a 4 year program, try a student credit card to start building up your credit record.
Multiple Applications NG
The credit card companies will run a credit check on you when you apply and will know that you are running simultaneous applications which is a bad sign. If you really want to apply for a certain credit card you’ve been rejected for, wait a while before trying again.
In-Person or Online
Credit card applications can be tricky; a simple spelling mistake can lead to rejection. Sometimes it helps to apply in-person where an attendant can assist you.
Perks to having a Japanese Credit Card
In Japan, having a credit card is not just for the convenience of not having to carry around cash, it is also a money saving tool. Not sure what I mean? Here are some examples.
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Earn points when you spend to exchange for coupons or to use as credits
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Get discounts from affiliate stores of the credit company, like restaurants, amusement parks, fashion boutiques, even car rentals, hotels and hair salons.
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High-end credit cards may give you birthday presents or huge sign-up bonuses.
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Some credit cards may even allow you to convert your points into airplane miles, so your next holiday may be free!
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Most credit card companies in Japan are linked with an electronic money service, such as ID, QUICPay, RakutenPay; this means that you can connect your credit card to your smartphone (ApplePay, GooglePay).
Writer's Pick
Recommended Credit Cards for Foreign Residents
There are numerous credit cards available in Japan, each with their own benefits. Below are some credit cards that are said to have high acceptance rates of foreign applicants.
Rakuten Credit Card
E-commerce giant Rakuten also offers credit card services. With over 20 million cardholders, it is one of the top used credit cards in Japan. Rakuten is one of the easiest credit cards to acquire for foreigners with a simple sign-up page that although is only available in Japanese works very well with Google Translate (or follow one of the numerous guidelines online). If you encounter any problems, they have an English FAQ and also English customer support.
Additionally, Rakuten is the easiest credit card to rack up points in Japan. With a high point rate and a strong presence in Japan, your Rakuten points will accumulate in no time. For first time cardholders, you can receive 2,000 free points!
Nexus Global Card
For foreign residents without a bank account, Nexus Global Card (previously known as J-Trust Global Card) is the best way to get a credit card. The catch is the requirement of a deposit which works as a guarantee - the deposit amount will be your credit card limit.
EPOS Card
EPOS Card offers various credit card plans, pick one that is suitable for your needs. EPOS is notable for its credit card designs made in collaboration with other companies, such as San-X’s Summiko Gurashi and Rilakkuma, Capcom’s Assassin Creed, computer company HP, and anime series (Evangelion,, ONE PIECE, Fate, Gintama). For existing EPOS cardholders, you can collect these cool, beautiful, adorable designs for 1,000 yen per piece.
Others
Of course, there are other credit card companies you can apply for such as Amazon, American Express, JAL or even MUJI. If you are having trouble signing up for a credit card, try asking the bank of which you are an account holder. Notable banks include MUFG and SMBC.
Applying for a Credit Card
Documents Required
After providing your personal information, you will need to provide proof of identity which can be from the following:
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Residence Card
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My Number Card
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Japanese Health Insurance Card
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Japanese Driver’s License (if you have one)
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Student ID (alongside another identification document when applying for student credit card)
Step-by-Step Guide
This is the general flow to obtain a credit card:
Research
Research which credit card is ideal for your lifestyle. Consider any initiation fees, annual fees, the credit card limit, benefits, and eligibility requirements (annual salary requirements).
Application
Apply for the credit card you are interested in via the credit card company’s official application page or in person. Remember not to apply for several simultaneously.
Screening
Your application will be screened. The credit card company may contact you to confirm certain details.
Confirmation
You will be informed whether your application is approved or rejected. Sadly, they will not reveal their reasons for any rejection. Wait a little to try again at the same company or try a different company. If you keep getting rejected, apply in person to avoid any mistakes or wait a year whilst you make some life adjustments (long term residency, stable employment, higher salary, etc.).
Receive
If your application is approved, just wait for the card to be delivered to you.
Summary
Having a credit card is one of the greatest perks of modern life, with great benefits and convenience to ease your shopping experience. If the thought of owning a credit card scares you and you’re afraid to take up the responsibility, don’t fret as Japan has more to offer in the form of mobile payment (Paypay, LinePay), debit cards, and IC cards (SUICA/Pasmo), so a cashless life is still a possibility for you.
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