Credit History Is Greek to Them
Imagine not being able to rent a car, get an Internet account or buy an airline ticket on a whim because you don’t have a credit card, even though you’re credit history is beyond reproach.
It happens every day to executives who have taken jobs abroad. While international transfers often take employees to better jobs and higher pay, their credit histories don’t travel with them because data protection and privacy laws prevent the movement of credit reports from one country to another.
So, while Visa International Inc. and MasterCard International Inc., the leading U.S. credit card brands, and others are correct when they say their products are good anywhere in the world, you must also pay the charges on the cards where the cards are issued and in that local currency. And that can lead to problems.
Attorney Wallace Brockhoff moved from the U.S. to London for a new job in 1998. He regarded the move as temporary but wished to use a credit card that he could pay off in the same currency in which he was being paid.
After holding a Platinum Visa card issued by Wilmington, Del.-based MBNA America Bank for a year before the move, Brockhoff was rejected for credit by the company’s British unit, MBNA International Bank. He said he has a flawless credit history and above-average income.
“Not only are they not sharing information between branches, their customer service is no good,” he said, after failing to receive a reply to a letter questioning his rejection.
MBNA Corp., the bank’s holding company, which had $54 billion in outstanding balances on its U.S.-issued cards at the end of last year’s third quarter, did not return calls seeking comment.
Brockhoff finally obtained a British-issued card denominated in pounds through the Bank of Scotland--six months after arriving in the country.
In the interim he had kept a U.S.-issued card, from an MBNA rival, and was able to get by, he said, although “with the hassle and expense of getting paid in one currency and paying in another.”
Part of the problem is that “there is no international credit reference organization,” said Angela Diamond, a spokeswoman for Commonwealth Bank of Australia in Sydney.
In some cases the problem is compounded because Visa and MasterCard are only brand names, distributing their products through thousands of separate banks. Each bank’s relationship with a client is private, and while a credit card applicant can request his or her new bank to approach the old, there is no guarantee that the old bank will comply.
Jennifer Hewett, a journalist with John Fairfax Holdings Ltd. was transferred from her native Australia to the newspaper group’s Washington office for three years in 1996.
Having a 20-year history of good credit, including homeownership, 12 years as a MasterCard holder with the Commonwealth Bank of Australia, and being married to a U.S. citizen didn’t help. She was rejected for every card she applied for upon her arrival.
After a year of trying, she finally obtained a MasterCard, issued by a local bank, with a credit limit of $500. “By the end of my time [in the U.S.], I was getting offers in the mail” for pre-approved cards, she said.
MasterCard International said it isn’t responsible for denying cards to such people. “MasterCard does not issue cards,” said spokeswoman Sharon Gamsin. MasterCard accounted for a quarter of all charges on the top five credit card brands in the U.S. in the first half of 1999.
American Express Co. acknowledges that getting a card in a new country can be difficult. “It’s really hard to get a new credit history,” said James Tobin, vice president of public affairs for American Express in London. “You basically start from scratch.”
