Offshore credit cards are comparatively new type of service that offshore banks provide for their clients. Only couple of years ago typical offshore bank client did not have such a convenience to access his/her savings so easily through the credit cards that are linked to the offshore bank account. In the past if a client wanted to access money kept offshore, he/she had to personally withdraw it from his/her offshore bank account by physically visiting bank office or transfer it to onshore bank account.
Both ways had serious disadvantages. In case of withdrawing money from the account an individual faced a risk of getting robbed on the way home and in second case when money was transferred from offshore to onshore account his/her privacy was seriously challenged, since it became possible to trace offshore account through this transfer.
This whole process was extremely inconvenient, inflexible and time consuming. Offshore credit cards made a huge step towards simplification of the ways an individual can access funds that he/she keeps in the offshore banking center. Offshore bank issued Visa and MasterCard offshore credit cards made a revolution in offshore banking business.
Offshore credit cards have almost the same features as the domestic ones. They are also branded under Visa and MasterCard and are accepted at millions of locations for paying in exchange for goods and services. In addition, they allow getting cash advances through automated teller machines (ATMs). Offshore credit cards also provide insurance, car
rental benefits, card replacement, offshore banking online services, carrying balances forward and many other services that is also available to normal credit card owners.
Although offshore credit card and domestic credit card have numerous similarities, there are some aspects by which they differ. As a rule offshore banks require their clients to provide certain amount of guarantee – a security deposit together with the application for the credit card. The amount requested by offshore banking institutions varies from case to case, however normally it is 125-150% of the credit amount requested. For instance, to get credit card balance of $20,000, a client should provide a security amount of $30,000. There are cases, when banks require security deposit of 200%.
It is possible to increase offshore credit card balance, but offshore banks require client to increase security guarantee as well by wiring funds or by any other acceptable method. The system of security deposits differs from the requirements that domestic banks set for their customers. In fact offshore credit cards are some kind of hybrid card, where credit that is extended is secured by client’s own money, therefore offshore banks often refer to such cards as “offshore cards”.
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