4/13/2012 7:55 PM ET|
New credit cards make travel harder
Thanks to a smart-card technology widely in use abroad, American tourists may encounter difficulties paying with their magnetic-strip cards. Here's how to avoid problems.
U.S. travelers abroad are between a chip and a hard place.
Other countries have so thoroughly embraced a more secure credit card technology called "chip and PIN" that tourists have found their American-style plastic doesn't work at some places overseas. The problem is particularly acute at automated kiosks, but travelers also can run into merchants who won't accept their cards.
Retired teacher John Morris of Denver encountered the problem in September after arriving at Charles de Gaulle Airport outside Paris. A train ticket into the city cost less than 10 euros, but the automated kiosk required exact change or a credit card with chip-and-PIN technology -- neither of which Morris had. There was a ticket booth with a human teller where Morris could have used his American Express card, but it was swarmed with other travelers.
"I asked some people near the front of the line how long they'd been waiting, and they said two hours," recalled Morris, 70. "I couldn't find anywhere that would make change. Even Air France, my airline, refused to change a 20-euro note."
Morris -- frustrated, angry and hot, because the station was sweltering -- wound up taking a taxi into Paris, a trip that cost 60 euros, or about $80.
It's not that your credit cards are useless overseas. Most merchants and travel providers in Europe, Asia, Latin America and Canada -- the areas that have adopted the smart-card technology -- still accept U.S. credit cards, says Odysseas Papadimitriou, who travels to Europe a few times a year and is the chief executive of credit card comparison site Card Hub.
But U.S. cards, which rely on older magnetic-strip technology, simply won't work in machines that require users to punch in a personal identification number, or PIN, that's matched against a computer chip embedded in the card. U.S. debit cards won't work in these machines either, because they lack the all-important chip.
You could find yourself:
- Trapped in a parking lot that relies on automated kiosks to exit.
- Unable to buy gas at a pay-at-the-pump station.
- Prevented from buying bus, subway or rail tickets.
- Stopped at toll booths that require chip-and-PIN cards.
Some travelers report they've also encountered problems with clerks who don't know how to process a swipe-card transaction or merchants who refuse to accept U.S. cards, believing they're less secure. Such problems seem to be more common as time passes and fewer people are familiar with the older technology, especially in Europe, said Dan Ray, the editor-in-chief of CreditCards.com.
"The odds are greater now that you'll have some trouble," Ray said. "Europeans are less likely to have the machinery or the people who are eager to process your card."
Your debit card will work in overseas ATMs, but you may want to shorten your PIN if it's longer than four digits. Many foreign ATMs don't accept longer PINs. Also, foreign ATM keypads often don't have letters. If the only way you remember your PIN is by typing in a word into the keypad (say your password is 9-6-7-3, but you remember it by typing in the corresponding letters W-O-R-D), you should memorize the digits before you go.
True chip-and-PIN cards are hard to find in the U.S., credit card experts note. Diners Club is replacing its customers' cards with chip-and-PIN versions, Papadimitriou said, and Wells Fargo is testing a version. (Don't count on getting one, even if you're a Wells Fargo customer. When I called the bank recently to request one, the phone rep had no idea what I was talking about. After talking to a supervisor, he said I wasn't eligible.)
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Funny. As a Canadian, I'm very much used to chip-and-pin (we've had it for about 5-6 years now), but ironically, I ran into an issue in the US on a road trip last summer, where I encountered a number of gas stations that required a zip code to be entered when paying at the pump with my VISA. Not having a zip code made this fairly irritating (it isn't the end of the world to have to go into the station to pay, but you lose the convenience). So these things can catch people out all over the place, and not just overseas.
I am surprised that the US hasn't moved to chip-and-pin, as it is quite a bit more secure than just swiping, and with the growing concerns around debit/credit card fraud, makes sense to use. Plus, it might allow you to drop the zip code thing.
I've lived and traveled overseas over the past 15 years, and each year it gets more difficult to use my US cards. Before moving to Asia this past year for work, I checked with all the major banks, my local Credit Unions, and Credit Card companies. Capital One is the best deal I found for traveling abroad, but they do NOT offer the chip and code technology. I found a West Coast bank that offered the card, but I had to go into one of the branches to open an account first. Being on the East Coast, that was impossible.
In doing research last summer, I found the reason we Americans do not have this system (why it is not wide spread) is because banks would have to upgrade their systems, which would cost several billions of dollars. Until it is forced upon the industry, no one big bank wants to make the capital investment. In the meantime, I can certainly relate to being stuck in the airport with cash, but no coins and no way to get that one little subway ticket into town. It is very frustrating.
My solution was to use a foreign (major international) bank. I had to open an account in order to get a card, but I can use it ANYWHERE in the WORLD where Visa is taken. I know it is not an option for everybody, but carrying a lot of cash scares me. In a large city where a very large percent of the population travels abroad regularly it seems there would be a Credit Union, or bank that would offer such a card. Maybe there is, but I did not find one on the East Coast.
When travelling to the UK last year we had a lot of trouble with our credit cards in the smaller cities and with smaller businesses ( my brother owns several businesses and said he would not take a credit card without the chip and pin...apparently as a business owner he has much more recourse against a card that has chip and pin than one without)....in London, all the major places (Harrods, Museums,restaurants etc) took my US card but a lot of the smaller mom and pop places wouldn't.
Definetly if you plan on travelling in Europe make sure you have cash and if you are going to be staying somewhere away from the main tourist places (my parents live in a pretty small town where you wouldn't normally see tourists) plan on utilizing cash and/or ATM.
As a frequent visitor to England I will be looking into getting a card in the future with the technology in it.
Why don't our cards have the same technology? I was in europe last year and only took one card with me. I used it in Italy and it worked fine. Then we were in Spain and it would not work. My credit card company cut it off. They didn't know who was using my card all over europe. I had to call amex and give them my itinerary and they turned it back on.
I work in the merchant service industry in the US. It's very very common for US merchants to call and ask about foreign cards. They have letters in the zip codes and the US does not, the software in the terminals are formatted for US only, so merchant are forced to bypass the prompt and may usually pay more becuase AVS was bypassed. They take CC security very seriously every other place in the world but here. 2 weeks ago GLOBAL PAYMENTS had a breach and CC numbers were compromised...another US company I'm fairly sure.
I"ve been in the industry since 2003 or so, and changes are coming. They started with the Durbin ammendment and soon I'm sure we'll see more regulation regarding fees and other pricing.
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