Stonegate Bank begins offering credit cards that will work in Cuba

Stonegate Bank became the first American bank to support credit cards in Cuba. It began offering this limited edition commemorative card Wednesday.
Stonegate Bank became the first American bank to support credit cards in Cuba. It began offering this limited edition commemorative card Wednesday.

Stonegate Bank began offering MasterCards Wednesday that can be used in Cuba, opening up an era where American travelers can plunk down credit cards to pay for their hotel bills and restaurant tabs on the island.

The Pompano Beach-based bank, which offered its customers debit cards for use in Cuba last November, is the first U.S. bank to support credit card transactions in Cuba since the thaw in relations between Washington and Havana. New financial rules issued by the Obama administration permit such transactions.

MasterCard and American Express said more than a year ago that they would stop blocking transactions on U.S.-issued cards in Cuba, but until Stonegate broke the ice, no American bank has been willing to allow their cardholders to use plastic on the island.

“This has been a work in progress over the last nine months. Hopefully, more U.S. banks will allow their customers to use their cards in Cuba, thus helping to alleviate the burden on travelers to the island,” said Dave Seleski, president and chief executive of Stonegate.

Prior to Stonegate’s embrace of plastic, American travelers have had to carry big wads of cash for their trips to Cuba or use credit cards issued by banks outside the United States. Those who use the new Stonegate cards must fall within 12 categories of travel to Cuba that the United States government allows.

The commercial bank, which also established the first U.S. correspondent banking relationship with a Cuban financial institution since the rapprochement and serves as the banker for the Cuban Embassy in Washington, has 21 banking offices in Florida.

“In addition to personal credit cards, we will also be issuing corporate, purchasing, payroll and prepaid cards within the next 30 days,” said Seleski.

Stonegate's new World or World Elite MasterCards for Cuba feature a stylized illustration of the Cuban and American flags by Cuban artist Michel Mirabal. Only 1,000 of the special limited edition cards will be produced.

The new Stonegate Cuba credit card offers a 0 percent introductory interest rate for one year and after that a 13.5 or 14.5 percent annual rate. There is no annual fee for the card, but Stonegate’s World MasterCard has an annual spending requirement of $10,00 and its World Elite Card has a yearly spending requirement of $40,000.

Stonegate’s Platinum MasterCard, which has no spending requirement, and other MasterCard products also will work in Cuba although they won’t bear the special flag illustration. The Platinum card has a 3 percent foreign transaction fee.

Both Stonegate’s credit and debit cards can be used in about 10,000 Cuban hotel, restaurants and other places that have credit card terminals. Stonegate’s debit card requires opening a personal or business account with a $2,500 minimum deposit.

Many of Cuba’s hotel properties are run by the military and that, said Capitol Hill Cubans, a blog on U.S.-Cuba policy, presents a problem. “Only hotels and retail stores owned by Cuba's military allow the use of credit cards. These hotels are primarily located in properties confiscated from Americans,” said Capitol Hill Cubans.

It contends that a provision of the Cuban Liberty and Democratic Solidarity Act against trafficking in confiscated properties makes Stonegate’s extension of credit for transactions in such properties illegal.