Expats Complain of Stricter Requirements for Indonesian Credit Cards

Irvan Tisnabudi | August 27, 2010

Expats should not expect the same banking standards as they receive in their own country or overseas, while they are in Indonesia. The situation is different here and the banks are obviously making plenty of profits from the local market. When I was an expat in various european countries (even eastern europe) I never had any problems and the service was excellent. But I've had loads of problems in Indonesia. My advice is to go to BCA and deposit 15jta into a blocked account. They will then give you a credit card and every 6 months you can't increase your credit limit by calling halo bca. HSBC and CITIbank operations in indonesia are nowhere near as good as they are overseas. Here, they behave with a very local mindset. We would expect such international companies to behave more professionally, but they don't. And they don't train their staff properly either. Best option is BCA, but make your application at a major branch, not the smaller ones because they are not able to process your application.

Roland
11:41am Aug 28, 2010

Interestingly I had a while ago from Citibank for a Platinmum card which I accepted - but actually with a desperately low limit, less than 20 % compared to my former Diners Club Card, which I had still from my home country but returned in the end as almost nobody accepts this card in Indonesia. I know though that I got the offer from Citibank only as I had over a period of time a few 'major' foreign currency transfers from Europe, at least in their eyes and they were Citibank account to Citibank account!

Don't get me going about BCA - the most arrogant bunch of morons with zero customer service. Some of the smaller branches are a bit better and some individual employees are alright but in general their attitude is deliberately not service minded at all. Just around 2 years ago I moved all my accounts to Mandiri, which is friendlier, although my request for a credit card (even though I have a flawless credit record with Citibank for over 10 years) got so far not honoured!

In regards of loans from banks - it is well known that bank clerks approving loans are expecting in general for a successful application an 'appreciation' of 5 - 10% of the total sum, regardless of the bank, but again first BCA, followed by BRI, regardless of the collateral one might is able to offer!

Rico Frans' excuse that foreigners need an ownership of property (which of course they are not allowed to by Indonesian law, not even apartments) is a very thinly veiled excuse - or, what I don't believe he simply doesn't know about that!

bulegaul
10:34am Aug 28, 2010

Rico Frans from Citibank is talking nonsense! I've been in Indonesia 8 years, am a Premier customer at HSBC (says something about my worth!), have a Premier Credit Card from HSBC, Platinum Mastercard and Visa cards from ANZ..yet, three separate applications from Citibank have been rejected. And of course they won't tell you why. I use BCA as my daily transaction account but they also won't give me a Credit Card. I don't need more credit. I just want access to their special offers which in the case of Citibank are often very good. As far as I can tell, the banks think all foreigners are going to flee leaving a huge debt behind. I'd be interested to hear the default rate for foreigners vs locals. Anyone brave enough to tell?

garydean
8:52am Aug 28, 2010

Because foreigners tended to rent, Frans said, locals — who were more likely to own homes — had a better chance of approval.

Husna Zahir, chairwoman of the Indonesian Consumer Protection Foundation (YLKI), said because expatriates were seen as more mobile, banks screened them more carefully than Indonesians.

Marta, from AKKI, said there were no laws specifically related to credit cards for foreigners, and that each bank had its own guidelines depending on its “risk appetite.”

“Banks should want as much clarity on their customers’ status as possible — especially with foreigners — because credit cards offer noncollateral credit,” he said.

Steve added that banks also had a “card-for-card” mentality, whereby applicants who already have a credit card from another lender would have an easier time getting additional lines of credit.

citibank: "He also said having a history with a bank would also make applying for a credit card much easier."

ahem. foreigners are not permitted to own property under indonesian law.

sounds like citibank grasping for excuses.


peterR
8:04am Aug 28, 2010

I think that everybody in Indonesia, including banks, make the basic assumption that everybody here is dishonest. They also have to huge problem of debt recovery through the law. The system of law is weak and corrupt. When I asked a relative how credit finance companies and banks recovered bad debt in Indonesia, he said that they sent round 'agents' to visit the debtor. From my experience, international banks like HSBC in Indonesia, from whom one would expect more progressive thinking, actually have a very local mindset. The service I receive from HSBC in Indonesia simply does not compare with what I would expect in my home country. Having said that, bank service is always pretty crap anywhere unless you are loaded. The banks even promote varying degrees of service by having the likes of 'Premier' service for the well healed, and 'Indifferent' for the peasants. For the arrogance that most bank show, considering that their greed and incompetence has over recent times brought the world to its knees and ruined the lives of many hundreds of millions, they should be gratefull they were not ripped apart by mobs in the streets. But with time honed smugness, they can still say down their noses, "I am sorry but you simply don't meet our requirements".

peterR
7:57am Aug 28, 2010

I think that everybody in Indonesia, including banks, make the basic assumption that everybody here is dishonest. They also have to huge problem of debt recovery through the law. The system of law is weak and corrupt. When I asked a relative how credit finance companies and banks recovered bad debt in Indonesia, he said that they sent round 'agents' to visit the debtor. From my experience, international banks like HSBC in Indonesia, from whom one would expect more progressive thinking, actually have a very local mindset. The service I receive from HSBC in Indonesia simply does not compare with what I would expect in my home country. Having said that, bank service is always pretty crap anywhere unless you are loaded. The banks even promote varying degrees of service by having the likes of 'Premier' service for the well healed, and 'Indifferent' for the peasants.

Jakarta. While most Indonesians are being bombarded by aggressive marketing for credit cards, some foreign nationals living in the country say they are still finding it difficult getting them.

Several expatriates who spoke to the Jakarta Globe said both local and international banks in Jakarta often required hefty deposits on credit cards, sometimes up to 110 percent of the available credit, while others said their applications had simply either been ignored or they were told they were not eligible because they were not citizens.

“I was told to do a one-time deposit totaling 110 percent of the credit card limit of the type of card I chose when I applied for a Bank CIMB Niaga credit card,” said Thomas, an English language tutor.

“But I thought that putting in a deposit would lose the basic purpose of getting a credit card in the first place, so I rejected the offer.”

Even at international banks, such as Citibank, Thomas said his applications were turned down as soon as he told them he did not have a credit card from a local bank.

A marketing manager at a beverage distribution company in Jakarta told the Globe that two local banks, Bank Negara Indonesia and Bank Mega, had told her that she needed a deposit of 80 percent of the credit limit before her application would be approved.

“Other than that, my credit card applications for two foreign banks, HSBC and Citibank, received no further feedback or processing,” she said, asking not to be identified.

Steve Marta, general manager of the Indonesian Credit Card Association (AKKI), acknowledged that banks often had additional requirements for foreign nationals who were seeking credit.

“Foreigners tend to be more mobile,” he said. “This gives banks more leeway when determining whether foreigners will be granted credit cards, compared to when they process local applicants.”

According to Marta, banks should only require a passport and temporary residency permit, or Kitas, as well as evidence of sufficient income, in order to qualify, but many asked for other “flexible” requirements when processing non-Indonesian applicants.

As an example, he said a letter of notice from the person’s employer regarding his or her employment status would facilitate the filtering process.

Several credit card applications examined by the Globe, however, did not list letters of notice as a requirement.

Zulnasri, head of BNI’s external communication division, acknowledged that the bank had different requirements for expatriates, but denied that it intentionally made it more difficult for them to obtain cards.

“We don’t want to make it hard for foreigners, because offering credit cards is like selling a product — so we want to sell as many as possible,” he said.

“But we have to sell them safely, or else we’ll suffer losses. This also occurs in other countries, like in Singapore — it’s hard for foreigners to apply for credit cards there.”

Rico Frans, head of country marketing at Citibank, said his bank welcomed foreign credit-card applicants, as long as they had a local residence, a Kitas and a passport.

He explained that further screening took into account whether applicants were renting or owned their residence, but said that process was the same for locals and foreigners alike.

Because foreigners tended to rent, Frans said, locals — who were more likely to own homes — had a better chance of approval.

Husna Zahir, chairwoman of the Indonesian Consumer Protection Foundation (YLKI), said because expatriates were seen as more mobile, banks screened them more carefully than Indonesians.

Marta, from AKKI, said there were no laws specifically related to credit cards for foreigners, and that each bank had its own guidelines depending on its “risk appetite.”

“Banks should want as much clarity on their customers’ status as possible — especially with foreigners — because credit cards offer noncollateral credit,” he said.

Steve added that banks also had a “card-for-card” mentality, whereby applicants who already have a credit card from another lender would have an easier time getting additional lines of credit.

He also said having a history with a bank would also make applying for a credit card much easier.