Why You Shouldn't Get a Credit Card in Malta

I already had a debit card from the HSBC-Malta, but of course, I thought it would be useful to have a local credit card in case I was temporarily short on cash when I needed something. It wasn't too long before I realized this credit card in Malta was like no other I've ever had.

Before you sign up for a credit card here in Malta, be aware of the following:

Your own limited credit limit. You don't get a substantial credit limit as you do in other countries. For example, in the U.S., the typical VISA has a limit of about $20,000. With the HSBC VISA, I was told I could name whatever amount of credit I wanted, but it had to be a small amount. So I chose 300 Euros.

Back it up. After you choose your credit limit, the bank informs you that you must back up the credit limit with cash from your savings or checking account. I found out later that the bank actually puts a hold on your money for twice the amount of credit you choose for your credit limit. For example, the bank put a hold on 600 Euros on one of my accounts as a type of collateral. (A hold means that you cannot access your own money for a prescribed period of time, determined at the bank's discretion.). All this withholding on your account makes this card no different than a debit/cash card because you are using your own money. But to make it worse, you lose access to your funds and you can charged interest on your own money you loan to yourself.

Expect extra fees.
Your first statement will come with unexpected fees. My first statement had about about 35 Euros worth of fees that I had not been aware of. One was a start-up fee which would be charged annually to my account. The other was some kind of state fee the bank said it was required to charge customers. (Within a few months, the state fee was removed because the government deemed it was an illegal charge.) In the U.S., I had no annual fee for my credit card.

Very hard to get your money back. If you decide to cancel the card, you will have great difficulty getting the hold released on your funds. When I canceled my card, the bank proceeded with the paperwork and shredded my card. I asked about my money on hold and they said it would be on hold for 45 days from the day of cancellation and then would be available to me. That sounded like too long, but I marked the termination date on my calendar.

Using stall tactics. You won't get your money back after 45 days, as promised. After 45 days had passed for me and I saw that the hold had not been removed, I went to the bank and had to endure 60 minutes of debating one excuse after another the bank gave me for not being able to release the hold on my account. This included everything from being unable to find the information on the correct computer-- to saying that the process had to go through another department and would take an additional unknown amount of time to process. After asking to speak to the manager, the process sped up. I was told that my money would be available later that afternoon.

Outright deception about funds availability. If you leave the bank before securing your funds immediately and on site, you still won't see your money. When I was later unable to transfer my funds online, I called the manager of customer service who told me go through the 24-hour phone service and demand that the hold on my funds be released immediately as an order from him.

After 30 minutes of struggling through the phone menu of the HSBC-Malta bank, I finally reached someone who looked at my account and said that there was now a 60-day hold on the funds. As of this writing, I still have not received my money and am planning to go back to customer service and make a scene until I receive my funds.

So please remember: Do not accept the offer to get a credit card in Malta. It is not a credit card; it's a debit card in which you loan your own money to yourself. But unlike a debit card, the bank will put a hold on a significant amount of your funds, will charge you--even illegally--for the use of the deceptive card, will charge you interest on your own money--and will do anything to avoid returning your money to you in a reasonably timely fashion.

Ilene Springer lives and teaches EFL in Malta and will be changing to another, private bank in Malta as soon as she receives her funds. She is author of An-American-in-Malta.com.