Daniel sent us this one — and it's basically a cry for help wrapped in a very specific question. He's lived in Israel for years, he's fed up with the banks, and he wants to know: is there any way to get a non-Israeli, fiat-based, US dollar denominated credit or debit card that actually works for someone living here? Not some sketchy workaround that collapses in six months. A real financial instrument with good digital UX, decent customer service, and legitimacy. His thesis is that the best financial advice for living in Israel is to avoid Israeli institutions entirely. So where do we even start?
We start with the fact that he's mostly right, and the reason he's right isn't an accident — it's structural. Israel's banking market is an oligopoly. Five banks — Leumi, Hapoalim, Discount, Mizrahi-Tefahot, and First International — control roughly ninety-five percent of retail banking assets. That's from the Bank of Israel's twenty twenty-four annual report. When five players own the whole board, they don't compete on customer experience. They compete on inertia.
The "take it or leave it" model of customer service. Which explains the call center that closes at four p.I mean, that's not a call center. That's a hobby.
It's genuinely remarkable. And it's not just the hours. Israeli credit card cashback rates average half a percent to one percent, according to the Bank of Israel's credit card survey from last year. In the US, two to five percent is standard. The Israeli card issuers — Isracard, Max, Cal — they're not even trying. Why would they? Where are you going to go?
That's Daniel's question exactly. He wants to know where else he can go. And his first instinct was probably Wise, the company formerly known as TransferWise. Multi-currency account, debit card, great FX rates, beautiful app. It's the obvious answer. And it's blocked.
Wise is not registered as a payment service provider under Israel's twenty nineteen Payment Services Law. The Bank of Israel has not approved them. If you try to open a Wise account with an Israeli address, an Israeli phone number, a Teudat Zehut — you get rejected at the address verification step. I've seen the support page. It's explicit. Israeli residents are not eligible.
This is not a "try a VPN" situation. Wise requires proof of address. Utility bill, bank statement, something with your name and address on it. They run periodic checks. People have had accounts frozen and closed when Wise figured out they weren't actually living at that address in Portugal or wherever.
The regulatory choke point is real. The Payment Services Law requires any foreign fintech that wants to operate here to register with the Bank of Israel and comply with local anti-money laundering and know-your-customer rules. It's not a trivial process. It's expensive, it's slow, and for a company like Wise that operates in dozens of countries, the Israeli market of nine million people just doesn't justify the compliance cost.
Nine million people who are, famously, desperate for better banking. So you'd think there's demand.
There's demand, but the regulator hasn't made it easy. The Bank of Israel launched a regulatory sandbox for foreign fintechs in January twenty twenty-five — it's designed to let companies test the waters with a lighter regulatory burden. As of July twenty twenty-six, no major neobank has entered. Not Wise, not Revolut, not N26. The sandbox is open but the sand is, apparently, not inviting.
The sandbox is full of cats. Let's talk about the ones who tried and left.
Revolut was actually exploring the Israeli market and then pulled out in twenty twenty-two. They cited regulatory complexity, according to CTech's reporting at the time. N26, the German neobank, stopped accepting Israeli residents the same year. They put up a blog post in June twenty twenty-two saying essentially, we're focusing on our core European markets, compliance costs are too high, goodbye.
The three biggest names in global neobanking — Wise, Revolut, N26 — have all either rejected or abandoned Israeli residents. That's a clean sweep. What about American Express? Daniel mentioned wanting a US dollar denominated card. Amex is global.
American Express Israel is a separate entity from Amex US. They're related but distinct. There is something called Amex Global Transfer, which lets you take your Amex relationship from one country to another — if you already have an Amex card in, say, the US or the UK, you can sometimes get one in Israel. But for a non-American with no prior Amex relationship, it's a dead end. You can't just apply for a US Amex card from Israel without a US Social Security number and a US credit history.
The obvious paths are all blocked. Wise is out. Revolut is out. N26 is out. Amex US requires a US identity. What does that leave?
This is where it gets interesting, because there are paths. They're just not obvious. The most plausible one for someone like Daniel — who's not American, lives in Israel, wants a US dollar denominated card with good digital UX — is the US business entity route.
He forms a company?
He forms a US LLC — a limited liability company. You can do this entirely online from Israel. Services like LegalZoom or Stripe Atlas handle the paperwork. It costs about three hundred dollars to set up, plus annual state filing fees. If you register in a state like Delaware or Wyoming, the annual costs are low — maybe a hundred to two hundred dollars a year. California is more expensive, about two hundred dollars a year in franchise tax minimum.
Once you have the LLC, you're not just a guy in Jerusalem asking a US bank for an account. You're a US business.
And US digital banks like Mercury and Relay will open accounts for US LLCs even when the owner is a non-resident foreigner. Mercury is especially popular for this. You get a US business checking account, a debit card, a beautiful web dashboard, and it's all denominated in US dollars. Customer service is email and chat based, typically under an hour response time. It's not phone support, but it's real.
The debit card works for online purchases, it's USD, it's got good UX, and the customer service is better than a call center that closes at four p.That's checking a lot of Daniel's boxes. What's the catch?
A few catches. First, there's the annual compliance cost. You need to file IRS Form 5472 every year as a foreign-owned US LLC, plus a pro forma tax return. You'll probably want an accountant who knows cross-border stuff. That's maybe three to five hundred dollars a year. Second, the LLC route gives you a business debit card, not a personal credit card. It won't build your US credit history, and it's technically for business expenses. People use it for personal spending too, but you're in a grey area.
The "business expenses" being your grocery bill and Netflix subscription. I'm sure the IRS is very concerned about that.
In practice, it's rarely an issue for small amounts, but it's worth knowing. The bigger practical question is how you fund the account. Daniel earns in shekels. He needs to get shekels into a US dollar account without losing three percent to his Israeli bank's foreign exchange spread.
Right, because Israeli bank FX spreads on international wires average two and a half to three percent. TheMarker did a comparison piece in January twenty twenty-six — it's brutal. You wire ten thousand dollars worth of shekels, you lose three hundred bucks just on the spread.
That's before any wire fees. So the workaround is to not use your Israeli bank for the FX. You use a specialist broker like Instarem or CurrencyFair. These are regulated money changers that offer rates around half a percent above the interbank rate, compared to the two to three percent at the bank counter. You send shekels to Instarem, convert to dollars there, then wire the dollars to your Mercury account.
The chain is: Israeli bank account to Instarem, shekels to dollars, then Instarem to Mercury. That's three steps every time you want to fund the card.
It is, and that's the friction. It's not instant. It might take two to three business days. You need to plan ahead. But you're saving one and a half to two percent on every transfer. If you're moving ten thousand dollars a year, that's a hundred fifty to two hundred dollars saved. If you're moving fifty thousand, it's real money.
Let's talk about the break-even on the LLC route. You said three hundred to set up, maybe three to five hundred a year in compliance costs. That's roughly five hundred dollars a year minimum. When does that pay off?
For a heavy spender in US dollars — someone who travels frequently, buys a lot online from US merchants, or earns in dollars — the break-even is around ten thousand dollars a year in USD spending. You're saving on FX fees, you're getting better cashback if you eventually qualify for a US credit card through the LLC, and you're avoiding the Israeli bank's international transaction fees. Below ten thousand a year, the compliance costs eat your savings. Above it, you come out ahead.
The LLC route is for power users. What about someone who just wants a better Israeli banking experience without the international gymnastics?
That's where One Zero comes in. One Zero is Israel's first new bank in over forty years. It launched in twenty twenty-three, fully digital, no physical branches. As of early twenty twenty-six, they have about a hundred and fifty thousand customers. The app is modern, the customer service is twenty-four seven via chat, and they offer a multi-currency account with competitive FX rates.
I've played with their app. It's good. It feels like a fintech product, not a bank that hired a design agency to reskin their nineteen nineties mainframe.
That's exactly the right description. And they're regulated by the Bank of Israel, so your deposits are insured, it's all legitimate. The limitation is that you're still inside the Israeli system. One Zero is a better interface to the same regulatory framework. You still have Israeli reporting requirements, Israeli tax implications, and you're still subject to Israeli capital controls and currency restrictions.
For the average Israeli resident who's just tired of Leumi's app crashing or Hapoalim's customer service telling them to come into a branch for something that should be a tap on a phone — One Zero is the best single move you can make.
And you can pair it with a dual-currency credit card. Several Israeli banks now offer these — Leumi has the Dollar Card, for example. It bills in US dollars, so when you use it for online purchases from US merchants, you avoid the one and a half percent foreign transaction fee that most Israeli cards charge. Combined with One Zero's multi-currency account, you've eliminated a lot of the friction without ever leaving the Israeli system.
That's the eighty percent solution. One Zero for daily banking, a dual-currency card for USD spending, and Instarem for any international wires. You're not getting US-style rewards or a fully offshore account, but you've fixed the worst parts of the Israeli banking experience.
That's worth spelling out, because the gap between Israeli cards and US cards isn't just about rewards. It's the total cost. On an international transaction, an Israeli credit card might hit you with a one and a half percent foreign transaction fee, a two and a half percent FX spread, and then give you half a percent cashback. Net cost: roughly three and a half percent. A good US card gives you zero foreign transaction fees, near-interbank FX rates, and two percent cashback. Net benefit: roughly two percent. The gap is over five percent per transaction.
Five percent is the "we don't care about you" tax. So we've got the LLC power-user route and the One Zero normal-person route. What about the digital nomad loophole? Daniel mentioned digital nomads specifically.
This is the grey-area option. If you maintain a foreign address — a friend's place in the UK, a virtual mailbox in Estonia, a relative's apartment in France — you can often open a Wise or Revolut or N26 account using that address. Many digital nomads do this. The platforms' terms of service technically require residency, but enforcement is inconsistent.
If the platform detects that you're actually living in Israel — through IP addresses, spending patterns, or a periodic address verification check — they can close your account and freeze your funds while they investigate. It's rare but it happens. And when it happens, it's a nightmare. Your money is locked up for weeks, you have no recourse, and you've violated the terms of service so you don't have much ground to stand on.
It's tempting, it works for a lot of people, but you need a backup Israeli account with enough money to live on if your foreign neobank decides to ruin your Tuesday.
Keep a funded Israeli account as your safety net. Never put all your money in the grey-area foreign account. And be aware that as open banking and data sharing improve, it's going to get harder to maintain the fiction of residency. The Bank of Israel and the tax authority are not naive about this.
The tax authority being especially not naive about money that might be sitting outside their view. Which brings up a point we should address directly: all of these workarounds are legal in terms of having foreign accounts, but Israeli residents are required to report foreign accounts and pay taxes on worldwide income. We're not talking about hiding money. We're talking about accessing better financial services.
The LLC route is fully legal and reportable. You file your forms, you declare the account, you pay your taxes. The benefit isn't tax avoidance — it's service quality and fee reduction. That's an important distinction.
Let's talk about one more angle Daniel raised: the "funded in debit" model. He specifically wants something he can fund periodically rather than a traditional credit card with a credit line. Why is that appealing?
For a non-American with no US credit history, getting an unsecured US credit card is nearly impossible. US credit card issuers want a Social Security number and a FICO score. A debit card tied to an account you fund yourself doesn't require credit history. You put money in, you spend it. It's simpler, it's lower risk for the issuer, and it gives you a US dollar denominated card with a Visa or Mastercard logo that works everywhere.
The Mercury debit card fits that perfectly. Fund the account, use the card, no credit check required. What about eToro? Daniel mentioned trading platforms that offer debit cards.
EToro is interesting because they do operate in Israel — they have a Money Changer license from the Israeli regulator. They offer a multi-currency wallet and a debit card in some markets. But eToro is primarily a trading platform, not a bank. Your funds are not FDIC insured, the card isn't available in all countries, and the experience is built around trading, not daily banking. It's an option, but it's not a banking replacement.
It's the "I wanted a checking account but I got a CFD platform" experience.
That's the one. Plus500 is similar — they have an Israeli presence and offer multi-currency wallets, but again, you're banking with a trading platform. The risk profile is different.
Let's zoom out for a second. The structural problem here — the reason we're having this conversation at all — is that Israel's banking reform has stalled. The Strum Committee published its recommendations in twenty twenty-one. These were supposed to increase competition, make it easier for new banks to enter, force the incumbents to improve. As of mid-twenty twenty-six, Calcalist reported that only about thirty percent of the recommendations have been implemented.
Thirty percent in five years. That's a pace that suggests they're not in a hurry. The open banking APIs that were supposed to let fintechs build on top of the existing banks — the Bank of Israel pushed for those in twenty twenty-four, but the real-world impact has been limited. The incumbents have no incentive to make it easy for competitors to plug into their infrastructure.
The oligopoly protects itself. It's not a conspiracy, it's just math. Five banks, ninety-five percent market share, no foreign competitors allowed in without a regulatory gauntlet. What exactly is supposed to change?
The regulatory sandbox is the official answer. The Bank of Israel says they're open for business, they want foreign fintechs, they've created this lighter framework. But a sandbox is not a license. It's a trial period with restrictions, and after the trial, you still need full regulatory approval. For a company like Wise that operates in fifty-plus countries, the Israeli sandbox might not be worth the legal and compliance resources.
Especially when the market is nine million people, many of whom will just keep using their existing bank out of inertia. The addressable market of people like Daniel — financially literate, English-speaking, willing to do paperwork to escape Israeli banks — is a fraction of that.
It's a niche within a niche. Which is why the workarounds we're describing are probably the permanent reality, not a temporary bridge until Wise launches in Tel Aviv.
Let's build the decision tree. You're an Israeli resident, you're fed up with the banks, you want better service and lower fees, and you don't want to use crypto. What do you do?
Tier one, for basically everyone: open a One Zero account. Modern app, twenty-four seven chat support, multi-currency, decent FX rates. Pair it with a dual-currency credit card from whichever incumbent bank you're already stuck with — Leumi's Dollar Card or equivalent. Use Instarem or CurrencyFair for any international wire transfers. This solves maybe eighty percent of the pain with zero legal risk and minimal effort.
Tier two, for people who spend heavily in dollars or travel frequently: the US LLC plus Mercury route. Set up an LLC in Delaware or Wyoming, get a Mercury business account, fund it via Instarem, use the Mercury debit card for USD spending. Annual cost is roughly five hundred dollars in compliance. Break-even at about ten thousand dollars a year in USD spending. This is fully legal, fully reportable, and gives you a US dollar denominated card with good digital UX.
Tier three, the grey zone: maintain a foreign address and use Wise or Revolut or N26. It works until it doesn't. Keep a backup Israeli account. Accept the risk of account closure. This is the "I value convenience over certainty" option.
The thing that doesn't exist: a non-Israeli, US dollar denominated, fiat-based credit card that's openly available to Israeli residents with no workarounds, no LLCs, and no grey-area address games. That product is not on the market in twenty twenty-six.
I don't think it's coming soon. The Bank of Israel's sandbox is a small step, but until the Payment Services Law is reformed to make registration easier for foreign fintechs, or until the Strum Committee recommendations are actually implemented, the structural barriers stay in place. Maybe by twenty twenty-eight the landscape looks different. I wouldn't bet on it.
The open banking angle is the one to watch. If third-party fintechs can eventually build on top of Israeli bank infrastructure through real, functioning APIs, you could see Israeli startups offering Wise-like experiences without needing Wise itself. There are companies working on this — Finubot, RiseUp — but they're early stage and their offerings are more budgeting tools than full banking replacements.
RiseUp is interesting because they do offer a multi-currency account and a debit card, and they're Israeli-regulated. But they position themselves as a money management platform for couples and families, not a full bank replacement. The feature set isn't quite there yet for what Daniel's describing.
The actionable summary is: One Zero is the best single move for most people. The LLC route is the power move for heavy USD users. Instarem or CurrencyFair for any international transfer, never your bank's wire desk. And if you're going to play the foreign address game, keep a backup.
On the customer service point specifically — because Daniel mentioned the four p.call center, which is just chef's kiss as a symbol of institutional indifference — One Zero's chat support is twenty-four seven. Mercury responds within about an hour by email. Wise has twenty-four seven chat but no phone support. None of these are perfect, but all of them clear the extremely low bar set by Israeli incumbents.
The bar is a call center that closes at four p.It's on the floor. You can step over it.
You can trip over it accidentally.
One final question: will this ever get better? Or are workarounds the permanent solution?
I think workarounds are the solution for the foreseeable future. The structural incentives are too strong. The five big banks have no reason to improve, the regulator moves slowly, and the market is small. What could change the equation is if open banking APIs actually mature and Israeli fintech startups build competitive products on top of them. That's a bottom-up disruption rather than waiting for Wise to get regulated. It's slower, but it's more likely.
The best financial advice for living in Israel is to treat the banking system as a necessary evil. Use it for what you must — salary deposits, mortgage, basic shekel checking — and route around it for everything else. The tools exist. They just require more paperwork than they should.
Which is, in a way, the most Israeli outcome possible. The solution exists, but you have to want it badly enough to fill out forms in two languages and three time zones.
Now: Hilbert's daily fun fact.
Hilbert: In the nineteen twenties, astronomers realized that lunar libration — the moon's apparent wobble — had an unintended consequence for observers in the Caspian basin: the combination of latitude and the moon's north-south nodding meant certain craters near the lunar south pole were visible from Baku roughly four extra nights per year compared to observers at the same latitude in North America.
The Caspian basin getting a bonus crater viewing window is not something I had on my bingo card.
This has been My Weird Prompts. Thanks to our producer Hilbert Flumingtop. If you enjoyed this episode, tell someone who's complained about their bank in the last month — which is everyone. Email the show at show at my weird prompts dot com. I'm Corn.
I'm Herman Poppleberry. The best banking advice is to have an LLC in Delaware and a friend in Estonia.
That's not our official position.
It's not not our official position.
