Charge It: Florida Bank Issues First Credit Card to Be Used in Cuba

A new credit card issued by the Florida-based Stonegate Bank and available Wednesday will allow Americans to avoid the Cuban 10-percent penalty on the dollar.

US citizens traveling to Havana can now do so without exchanging dollars, at a 10-percent fee, into the Cuban peso. Stonegate, the first US bank to introduce a debit card for use in Cuba, has issued a credit card as well.

The bank announced Tuesday that US travelers will be able to use its Mastercard to charge purchases at Cuban state-run businesses and some private businesses, starting June 15. The card's capability will be limited, as Cuba bars cardholders from cash advances, and point-of-sale devices are not always reliable.

"This is going to be huge for American companies trying to do business down here," Stonegate CEO David Seleski said.

For decades nearly all US financial transactions with Cuba were prohibited, due to a US trade embargo. The situation has gradually improved since US President Obama's normalization of ties with the island nation in December 2014. About 100 American individuals and businesses have opened Stonegate accounts, with debit cards authorized to be used for transactions in Cuba.

Havana previously said it would cancel the 10-percent penalty when the worldwide banking system allows Cuba to carry out international transactions in dollars.

Although the Obama administration has lifted a block on Cuban government peso-to-dollar transactions, banks still hesitate to process them because of liability fears generated by the remaining trade embargo, which can only be lifted by Congress.