Am I crazy? Am I seriously advising you to be frugal by getting a credit card? Well, yes actually I am, and I’ll explain why.
The absolute best part of having a card is getting an itemized bill at the end of month that tells you exactly where every yen went. In most countries, internet banking allows similar functionality if you use your banks debit card, but sadly the Japanese banking systems are stuck somewhere between 1910 and 1960, so your only way to get this functionality is with a credit card.
Using the itemized bill for December last year, I was able to break down my credit card spending as follows.
Now you can truly start budgeting and take control of your finances.
It’s not often you can get nothing for free, but credit card points are really one of those times. Even if the point percentage is 1% (1 point for every ¥100 you spend), that’s still going to add up over the years you are in Japan. There’s a pretty good selection of products you can choose from including kitchen appliances and short breaks in a traditional Japanese ryokans (at least with my Aeon card, which I thoroughly recommend). Get even more out of your investment payments and utility bills (gas, keitai, internet, electricity) by having them go through your card too. My average monthly credit card bill comes to about ¥150,000 yen, but that includes ¥50,000 that I invest into a managed fund and all my utilities, all of which are getting me an extra 1% return in points!
Getting a Card in Japan:
Most foreigners in Japan are unable to get credit cards, even directly with their banks. I only managed to get one after 2 years of being here. You will have to wait too, this is unavoidable. You can complain that this is discrimination all you want, but then consider that most foreigners end up staying for a year or less.: But to avoid having to wait even longer though, make sure you always pay your phone and utilities bills on time. In addition, when applying for the card always select the lowest possible credit rating and lowest withdrawal limit (you shouldn’t be using it as a credit source anyway if you’re following my advice).
Avoiding the credit part of credit cards:
When you set up your credit card, choose to have the entire balance paid off each month. This is the easiest way to never get into debt. As a responsible adult, you should be quite capable of realising how much you earn each month and therefore roughly how much your personal absolute limit on your card is. Do not make large purchases on a credit card unless you can split up the payments interest-free directly with the shop involved, or unless you know you have the cash in the bank to be able to pay it straight off. For example, Sofmap computer store allows you to break a payment into 6 months at no extra cost, so purchasing a new computer is not impossible (although you’re much better off upgrading instead, and always buy a desktop tower style computer for regular home use – not a laptop).