How America blockades your credit card in Cuba

Rupert Jones warns of a nasty shock in store for many holidaymakers who try to pay by plastic

As if contending with Hurricane Ike wasn't enough, some Brits on holiday in Cuba are finding themselves stranded without cash after discovering that banks, hotels and shops won't accept their credit cards.

Ann Howard and her husband, Andrew Morrison, this week told Guardian Money how their trip last month almost became a nightmare after no one would take their plastic. But why on earth would the island turn its nose up at Virgin Money and Egg credit cards, bearing in mind they display the globally recognised MasterCard and Visa logos? Heavens, you can even fly Virgin Atlantic to Cuba's capital, Havana.

The answer, it seems, is that the US blockade of the island is having far-reaching and arguably unjust consequences for us here on the other side of the pond. The US government operates an embargo against Cuba and, as a result, credit cards and travellers' cheques issued by American banks are not accepted. However, many people will be unaware that this policy also includes the UK divisions of US banks such as MBNA and Capital One.

A number of well-known credit cards that we would think of as "British" ultimately have a US company behind them. For example, Egg was last year taken over by the US banking giant Citigroup, while the Virgin Money card is issued by MBNA Europe, owned by Bank of America Corporation. MBNA issues cards for scores of UK companies and organisations, including Alliance & Leicester, and many charities and football clubs.

Ann and her husband enjoyed their 18-day holiday to Cuba - and were fortunate enough to avoid the hurricanes which have battered the island during the last few days - but almost had to fly home after discovering, to their cost, that no-one would touch their cards. "Although we took some cash, we were relying on our cards to get funds while we were there," says Ann, of south-east London. "Fortunately, the travel agent came to our rescue, but we were without sufficient money for seven days." The couple eventually managed to get some cash transferred from Ann's current account to the card of the agent's Cuban rep.

She says the card companies told them they do not do business with Cuba because their systems cannot be relied on. But this is likely to be a red herring; the real answer is that, as a spokesman for MBNA explains, "cards from US-issued banks are not accepted at all in Cuba. That is US law".

A Virgin Money spokesman says MBNA "has to abide by American law". Egg says: "We are sorry for any inconvenience suffered by our customer. However, Egg is a UK registered company with a US parent ... and is therefore subject to certain US laws."

The UK Foreign & Commonwealth Office's advice is: "Check with your bank to confirm that your debit/credit/cashpoint cards will be accepted. If it cannot confirm this, bring suitable sterling or euro alternatives, preferably in the form of travellers' cheques."

But not American Express ...