Manx residents can no longer use Tesco credit cards as the island is classed as outside the UK - the latest in a number of cards cut off from Manx customers.

Following one of its ’regular reviews’ Tesco Bank sent letters to customers stating that it will be closing all Isle of Man accounts. Accounts will be shut on May 3.

This is the latest in a number of credit cards that have been made inaccessible to Isle of Man residents in the last few years.

For example, Marks & Spencer stopped offering new credit cards to Manx customers in 2016 after arguing it was in line with the majority of UK banks and it was no longer viable given the complexity of offering products across different regulatory jurisdictions. But existing customers have been able to keep theirs. Lloyds Bank has also ceased in offering new cards to people here.

Arbory, Castletown and Malew MHK Jason Moorhouse will ask the Chief Minister next week if he is aware of the problem.

He said this was down to UK ’ring-fencing’, introduced as a response to the global financial challenges that started in 2008.

Mr Moorhouse said: ’The changes really started to have an impact on Isle of Man residents on January 1, 2019.

’The changes meant that the UK financial system was ring fenced and as a consequence of this some residents going to England, Scotland and Wales started to have issues accessing their Manx bank accounts while visiting the UK. New expectations were placed on all financial institutions as a direct consequence of the change.

’The risk and cost of offering banking and many other financial products rose and there was the risk of high fines and reputational damage for those financial institutions unable to monitor their networks outside the UK.

’As a direct consequence of this ring fencing, most credit card providers stopped offering new products to residents in the Isle of Man and anywhere else outside the UK.’

He said that in recent years Tesco Bank had decided to stop offering many existing products to its current customers.

The MHK added: ’Tesco Bank sold its mortgage portfolio to Lloyds Banking Group in September 2019 and on November 30, 2021, Tesco Bank announced it would close all of its 213,000 current accounts - it now appears to be rationalising its credit card base.’

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On his question to the Chief Minister, Mr Moorhouse said: ’I have raised this issue previously and some work was done during the last parliament to try to encourage local banks to make credit cards more widely available.

’HSBC appears to have been very proactive in this area. Other providers have required associated accounts to be open, which can make the application process slower and more challenging.

’I accept that while Tesco Bank has no operations in the island, the entity is owned and controlled by Tesco and HSBC appears to carry out the role of Tesco Bank’s clearing bank. Local customers might hope these two factors help in finding a solution.’

He continued: ’The core issue remains that island residents have found it increasingly tough to get a credit card, and a new issue has arrived which is those residents with a credit card might now be told the product is being withdrawn.

’At a time more people are having to find innovative ways to make their finances stretch until the next pay day, this is a concern for many local people.’

Henry Craine, from Peel, received the letter last week as a Tesco credit card user himself.

He said: ’It’s pretty poor show. It makes it very difficult for people in the Isle of Man.

’We’ve had all this before with the banks where they’re closing branches and taking away credit cards.

’The Isle of Man is going to become a nation of using cash if we’re not careful, which is a problem in itself in that no banks want cash.’

The 75-year-old added: ’I think they just decided they want out of the Isle of Man really - much like some of the other credit card suppliers.’

Currently, the main providers of credit cards for the Isle of Man seem to be HSBC and Isle of Man Bank (RBS). Mr Craine said it’s now a dire situation in trying to get a credit card in the Isle of Man.

’It’s becoming very limited,’ he said. ’We’ve got an M&S card but I don’t think they’re issuing them anymore. You can get an HSBC card because I believe they’ve got a setup that’s the Isle of Man and the Channel Islands.’

Tesco Bank said: ’Following the UK’s withdrawal from the EU, we reviewed where our credit card customers now reside. As our products are specifically designed for UK residents, we took the decision to advise those customers who do not reside within the UK that we would begin the process of closing their account.’