mikebg

Because the Israeli credit card market is a cartel, run by inefficient, Israeli style businesses, who never innovate for fear of 'rocking the boat' ... so no real competition anywhere unless they are forced to compete (like in mobile phones).

By the way, one reason Diners is often declined here in Israel is that the commissions they charge retailers are higher than for other cards.

clubman

Well Amex are notorious for charging very high fees, yet it's pretty much accepted by most businesses/retailers in Israel.

joshwex90

I'm finding more and more places do indeed accept Diners. It's around the same acceptance rate as Amex. (Interestingly, Discover seems to be accepted everywhere Diners is accepted, but merchants don't seem to know that. So if the merchant looks at the Discover card, they'll say "we don't accept that." But if they don't look and just swipe, they'll say "interesting, I didn't realize we accepted Discover.")

I too cannot understand why Israeli cards offer virtually no points. On my Gold card (Amex), I get 1 point for ever NIS 60,after the first 240 shek/month which earns nothing. And that's per card. So even though my wife's card and mine are the same account, they earn separately, so that's 240 shek per card. In America, I can get a 50K signup bonus, and then 1 point/$1, with some categories earning 2 or 3 points per $1!

FlyingOutTLV

I'm no expert, but I think the Israeli market has far less competition than the American one.

I do not have statistics to back it up, but I feel that Israelis prefer to use other methods for payments - cash mostly. And even when using CC they tend not to check their options and simply go with the card that they got from their bank. Again, this observation is my own.

That being said, and although I do feel there are differences between the two markets, it is weird to think the differences are THAT big. I mean, seriously, with the best ratio in the market (Leumi Multi-Platinum) you get a 1000 MP miles after about 2100$ in spend. That's ridiculous.

joshwex90

I agree with your assessment. The credit card market in the USA (can't speak for Europe as much) is much more dynamic than in Israel. You have significantly more issuers than in Israel, where you really only have 3 issuers: Isracard (issues all Amex, issues all cards for Bank Hapoalim, some cards for Mizrahi, lots of separate cards), C.A.L., and LeumiCard.

And very few people apply for credit cards outside of their bank offering. And Israel doesn't have true credit cards to begin with - just debit and deferred debit, though for some reason, debit cards have a credit limit!

Rewards are scarce, and there's rarely a true free card. In America, almost all banks have at least one free credit card option, and there's plenty of free cards that are excellent cards.

economyman

Israel has a much smaller total available market but I think I read somewhere that per capita the credit card spend is actually quite high. On that basis from an economic perspective it should be possible to offer similar benefits to Israelis but I guess as there is little competition there is also little drive to do so.

BTW - Leumi Card can be used as a true credit card with deferred payment. I think you need to pay a minimum of 5% of your outstanding credit every month.

turbjuo

correct on both accounts. were among the top cc users in the world. and regarding leumicard, its multi card is the most similar product today to a true credit card.

but this is all off topic. anyone knows something interesting regarding the elal card?

clubman

I doubt it...

As mentioned earlier, they won't even comment about it which is typical.

mkilmo

Well, there is also a difference between 1 LY point and 1 UA mile. If I recall correctly, UA sells these miles to partners at 1 cpm (give or take), whereas LY charges 1 $ (again, give or take). So, you'd expect 33x to 100x times fewer points/shekel. 100$ = 350 Shekels, so besides the annoying first 240 shekel rules & lack of signup bonuses, this is actually comparable.

The best option (IMHO) is to compare apples to apples. How much do you have to spend on your CC to get a free flight US->TLV->US (or v.v.) in Y (or C). For sake of argument, let's assume you spend 1K$=3.5K ILS a month (to deal with the 240 starting points "penalty", the more you spend the more LY will become "nicer"):
1 K$ = 1K miles/month = 85 months for a free Y (in saver) on UA (or 35 with the signup bonus, but you get it once). If you get 3 miles/$ it's 28 months (with no signup bonus).
3.5 K ILS = 54 pts/month = 26 months (to JFK) (no signup bonus).

In other words, for 1 mile/$, what you have from LY is superior (even if you consider flights to LAX, you might get the first one faster on UA, but by a few months, and then you are "doomed"), for 3 miles/$, they are comparable (JFK - better LY, LAX - better UA). Obviously, you need to factor in taxes, availability, etc., but they are roughly the same

clubman

This is what my current CCs earn me:


UK BA Amex Premium:

1. A sign up bonus of 25,000 Avios - enough for a round trip TLV-LHR in Y, 3 part miles part cash round trip in Y, or 4 one way upgrades to Business etc...

2. 1.5 points for every £1 spent or 3 points per £1 spent when using it with BA.

3. When I reach £10,000 spend, a free companion ticket in any class when booking a flights with points (yearly).

So once I've reached that £10k I would have earned anything from 40,000-55,000 points plus a free companion voucher which can easily be worth well over 100k points (depending on what one uses it for)


UK Amex Platinum/Gold card (I have both)

I earn 1 MR point per £1 spent, or double that on travel spend - conversation rate is then 1 point to 1 Avios with once or twice a year offers of 30%-100% extra

Israel Amex platinum:

I earn just 1 MR point for every 60 shekel spent, with a conversion rate of 6 points to 1 Matmid point (that would be 29 points if it were the regular card) so one return to London (900 points) would require spending 306,000 shekel (well over £50,000) or about 20% less if I was converting during one of the special promotions (which I would only do anyway).


Will be interesting to see what EL AL come up with...

economyman

Where did my message go? When the thread was merged my response to mkilmo disappeared!

economyman

well let me repeat it:

mkilmo - how did you get to 3500 shekels = 54 points? the best Israeli cards give you 10 to 12 points for 3500 shekels so at that level of monthly spend you are looking at 150 to 180 months for a ticket to JFK (1800 points in Y)

mkilmo

Sorry - got confused with the word "point". I thought the OP referred to LY's points, not Amex ones. You can redo my calculation with the correct values (i.e., 54 Amex points = 9 LY points + 20% = 10.8 pts). and JFK in Y is 1400 LY pts (=130 months).

joshwex90

I wasn't comparing MP miles to LY points. I was pointing out about the Israeli credit card market in general and their crappy rewards. I was comparing American Express Membership Rewards points in the USA to American Express Membership Rewards points in Israel.

Equivalent spend on the same Gold card in the USA and Israel:
USA: Signup (50K) + NIS 240 which is roughly equal to $68, so 50,068 points.
Israel: 240 shek = 0 points.

Yes, that's an extreme because I included the signup. But the idea is that there's no signup bonus. There's no true point rewards. In the UK, you get 1 point per GBP spent. I understand not wanting to reward 1 point per ILS spent. But what about 1 point per ILS 4 or ILS 5 spent? What about signup bonuses?

And you mention MP miles and the like. There's the MP Explorer card - try comparing that the MultiPlatinum LeumiCard, which is 10 miles per 6 points. Best possible conversion. Not sure how much spend required to get those 6 points, but I'm assuming that it's not quite as easy as getting those 10 miles with the Explorer card - $10 (NIS 35)

economyman

I stand corrected on the number of points needed for JFK but your calculation is best case scenario with the premium cards that convert at 6 to 1 and benefiting from the 20% bonus. So yes, in the best case you need 130 months or just 13 months if your spend is 35K NIS per month. In any case, it's really bad compared to what you get for credit cards abroad.