An American in Paris ... without a chip-and-PIN card
What one writer learned on her summer vacation is that America is behind the times when it comes to secure credit card transactions.
This post is from MSN Money editor Julie Tilsner.
We took a family vacation to Europe this summer, introducing our two teenagers to the continent my husband and I had backpacked through years earlier. We'd be visiting five countries in a whirlwind two weeks, visiting old friends and family.
It had been a few years since I last was in Europe, but I knew traveler's checks were a thing of the past. To avoid carrying around a fat wad of euros, I had planned to put large purchases, like train tickets, on my credit card.
But as I stood in an Amsterdam train station, trying to buy tickets to our next destination, I was told they couldn't take my card. It wasn't a "chip and PIN."
How could my card be so rudely rejected? It was a major credit card from a notoriously too-big-to-fail bank with a large amount of available credit. American money! Lots of it! Demanding to be spent! I stood there, staring at the clerk, my impotent card held in front of me like a signpost that screamed: "Quintessential Stupid American."
I'd never even heard of a chip-and-PIN card -- even though I work as an editor for a personal finance blog. I had read countless posts about traveling with credit cards, but I had never read that most places in Europe won't take your good, old-fashioned American swipe credit card.
Europe long ago switched over to "chip and PIN," a system in which each card has a computerized chip instead of a magnetic strip, and requires a personal identification number to complete the transaction.
Luckily, my credit union debit card worked fine and I was able to buy the tickets, but I was further vexed when my Visa card was refused at several more locations throughout Europe.
It struck me as odd that such a huge disconnect between payment systems in the U.S. and Europe was not better publicized. It wasn't until I searched European media that I began to find some information, such as this damning bit in an Economist blog:
With the rest of the developed world having embraced more secure “smart cards” (or at least in the process of doing so), America remains the only major country that still relies on antiquated payment cards that encode their sensitive data in a magnetic stripe on the back. In security terms, that is about as safe as writing your account details on a postcard and sending it through the mail.
It turns out even if I'd known about the chip-and-PIN revolution, I wouldn't have been able to get one. The only two U.S. providers that offer them are USAA, which primarily services military families, and the State Department Federal Credit Union.
Europay, MasterCard and Visa developed the chip-and-PIN technology more than a decade ago with the idea of creating a global payment standard. Ironically, neither MasterCard nor Visa currently offer such cards to their American customers.
Why don't the major card companies offer these cards? They promise they're getting to it. By 2015 for sure! But in the meantime, there are all those expenses.
What to do?
For now, American travelers in Europe have few options other than to bring their debit cards, and maybe some traveler's checks.
You can also check with the State Department Federal Credit Union, which anyone can join through its partnership with the American Consumer Council.
And you can start by reading a recent article on chip-and-PIN cards in the Washington Post, which I eventually dumb-lucked into, and is as informative as any I've seen.
Read it, do your homework, and let's all start nudging our credit card providers to show us the money!
You can actually chip-and-pin cards from AMEX (which isn't accepted very widely in Europe), Chase, and Citi.
I'm surprised that the writer was surprised by this since it's old news to me. I tried to get a chip card before my last trip to Europe, but citibank told me they couldn't get one to me in time. I was prepared to use my atm card and pay cash along the way, but actually was able to use my magnetic strip card in many places. I did not travel to France, so perhaps that is why I didn't have any issues.
Funny. Last summer I was traveling in England, Germany, and the Czech Republic and used my "dumb" credit cards all of the time and was not rejected a single time. Perhaps the travel expert is being paid to scare up business for the new cards???
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