A company called Travelex offers the Cash Passport card, a prepaid debit card with chip-and-PIN technology -- but the card offers a much less favorable exchange rate than what travelers can typically get with their credit cards.
Some other issuers, notably Chase and U.S. Bank, offer cards with so-called chip-and-signature technology. These cards work with the terminals that most merchants use to process chip-and-PIN transactions, but they won't work with automated kiosks, which require PINs.
"With chip-and-signature cards, fraud protection is done primarily online, meaning purchase authorization entails cross-checking fraudulent card numbers via the phone lines," Papadimitriou said. "However, unmanned kiosks at train stations, airports (and elsewhere) rely primarily on offline verification, which necessitates having a PIN that corresponds to an embedded card chip. Therefore, a chip-and-PIN card will be needed unless you can find an attendant to help you with the transaction."
Chip-and-signature cards from Chase include the British Airways Visa, the Hyatt Credit Card, JP Morgan Select Credit Card and the JP Morgan Palladium Card. U.S. Bank offers the chip-and-signature FlexPerks Travel Rewards Visa Signature, which also has "contactless" technology that allows it to be waved in front of special terminals instead of swiped.
"By all accounts, certain banks have opted to go with them instead of chip-and-PIN cards because the barriers to entry aren't as significant," Papadimitriou said, noting that the issuers don't have the expense of establishing a PIN management system. "And they still get a fancy new feature to market."
Michael Dolen, the founder of website CreditCardForum, said issuers shouldn't ignore U.S. consumers' calls for true chip-and-PIN cards. Although they may be a small minority, those who travel abroad tend to spend a lot, making them more valuable customers, he said.
Until chip-and-PIN cards are more widely available in the U.S., credit card experts recommend that travelers take the following precautions:
- Have at least some local currency with you at all times.
- Keep your passport with you for at least the first few days to see whether local merchants demand it as an extra precaution. Papadimitriou said he was asked for his passport several times by merchants in London.
- Consider buying train tickets in advance from the U.S. or making your transportation purchases during weekday business hours, when human beings are more likely to be available to help with your transactions.
Morris, the traveler who took the expensive cab ride, said American Express refunded the cost of the taxi after he complained about his inability to use the card. That was nice, he said, but even better was getting his replacement Diners Club card in January with chip-and-PIN technology.
"When I travel (abroad) now," he said, "at least I won't run into the same problem."
Liz Weston is the Web's most-read personal-finance writer. She is the author of several books, most recently "The 10 Commandments of Money: Survive and Thrive in the New Economy" (find it on Bing). Weston's award-winning columns appear every Monday and Thursday, exclusively on MSN Money. Join the conversation and send in your financial questions on Liz Weston's Facebook fan page.
