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For those of you who don’t know, in Europe, they utilize different credit technology called “chip and pin,” which is s system where cards are embedded with smart chips and a cardholder must put in their pin for each transaction to be approved. It is an ultra-secure method that makes it much harder for credit card hackers and fraudsters to steal from consumers since, rather than just stealing the information contained in a card’s magnetic strip, they’d have to know the carrier’s pin number as well.
As most of you know, however, most US cards are just your garden variety swipe cards with a simple magnetic strip and a signature between you and credit card fraud. Beyond the security implications, our US swipe cards also make it more difficult to charge things while abroad where many merchants use mobile credit card portals where you stick your card into a slot and enter your pin into a keyboard rather than swiping it through a reader. Granted, many merchants, hotels and restaurants let you use your swipe cards, but while I was on a quick trip to Europe this past week, there were several times when my old-fashioned American credit card just wasn’t accepted. Imagine how happy I was that I carry a few cards that have chip technology in them, such as the Chase Hyatt Visa and the British Airways card. (Note: These aren’t chip and pin cards – they still require a signature, though you use them in the chip slot of a machine and you don’t have to swipe them. However, I had no issues using them even at automated machines that didn’t make me sign anything.)
Smart Chip Situations
Of course, you should first be sure your credit card does not carry foreign transaction fees if you’re planning to travel abroad so you don’t get hit with 2-3% fees on all your charges. However, based on my experiences, my best advice is if you’re going to Europe anytime soon, have a chip card to cover you in the instances where a merchant won’t swipe cards. My most unique situation occurred after a late dinner in Paris one evening. By the time we left the restaurant it was nearly 1:00am, and the metro was closed. There were no taxis to be found, and the hotel was miles away. Paris has a fantastic system of public-use bicycle stations throughout the city where you can rent bikes even for short periods of time, but the automated machines will not take traditional US swipe cards. They do, however, accept chip cards, and I was able to use my BA Visa to rent one and bike back to the hotel instead, saving time (and my aching muscles).
To take another example, when you arrive at Charles de Gaulle and want to take the RER into the city, the machines selling tickets in the terminal accept only credit cards or coins, so you either have to have change on you for the 9 euro fare, or a Smart Chip credit card. The same is true of ticket machines in metro stations and French rail ticket machines. You can still pay for your tickets with either cash or getting in line at the ticket window, but having a chip card can save a ton of time, especially if you’re in a hurry to catch a train.
Chase Leads The Way
So far, the only US cards I know of with Smart Chips are the Chase British Airways Visa, the Chase Hyatt card and the US Bank FlexPerks Visa Signature. I think it’s great that Chase is leading the pack and issuing these cards – and there’s a rumor that they’ll add this technology to the Sapphire Preferred soon as well, which I’m hopeful about. As for the US Bank card, though it has a Smart Chip, making things easier when you’re abroad, it also still levies 2-3% foreign transaction fee, negating pretty much all of its value when you use it abroad. Amex doesn’t have any Smart Chip cards in the US to my knowledge, however, per reader comments below, it looks like certain Citi cards including the Executive AAdvantage World Mastercard and the ThankYou Premier card are now being issued with Smart Chips as well.
The reason more US cards don’t have chips is that the technology is expensive and not required by US merchants, so issuers are dragging their feet on this evolution. However, if enough consumers ask, we should start seeing more and more of these cards over time.
Just as a quick tip: if you don’t have a chip card and don’t plan on getting one before your next trip abroad, you can still get one from the Travelex money exchange stores in airports. However, these are basically just pre-loaded charge cards, and when you put money on them in foreign currencies, Travelex takes a huge cut on foreign exchanges. Plus, I’d rather have a Chase card than a Travelex card in my wallet any day!
Here’s another tip: If you already have the British Airways Visa or the Hyatt card and it doesn’t have a chip in it, you can call Chase to request a new card with a Smart Chip and they’ll send it to you for free. These cards have both the magnetic stripe and the chip, so you get the best of both worlds…plus the peace of mind knowing that, should you be stranded in Paris late at night with no taxis in sight, you’ll still be able to rent a bike and pedal your way home.
British Airways Visa Signature® Card
|Intro APR||Regular APR||Annual Fee||Foreign Transaction Fee||Credit Rating|
|N/A||16.24%-23.24% Variable||$95||0%||Excellent Credit|