Paycheck Chronicles

Alert: Credit Cards Abroad

There's always a new concern when it comes to using your credit cards overseas.  Now there is another thing to worry about - the rest of the world has, since 2004, been going to a different type of credit card identification system, called "chip and pin."  In theory, chip and pin readers should be able to read magnetic cards and retailers should still be able to process transactions on US credit cards.  However, customers are reporting problems with merchants who state that they are unable to process transactions using magnetic cards, and some self-service machines, such as gas stations and self-purchase transit tickets, are not equipped to accept the pin-less cards.

How can customers prevent problems when traveling in overseas?

  1. Before you leave, notify your credit card issuer that you are going overseas (a good idea anyway) and ask them to issue you a PIN number.  Some retailers are willing to use a magnetic card as long as you have a PIN.

  2. Carry adequate cash and/or traveler's check to take care of smaller purchases where a credit card may not be accepted.  Make sure you are able to use your debit card at ATM machines abroad in case you run low on cash funds.

  3. As the retailer to try to use the card in their machines, and ask for a manager if necessary.  Sometimes it is a problem with the staff not understanding the new system, not a problem with the system itself.

 

It doesn't seem that US credit cards are going to change to the new chip and pin system anytime in the near future, although it is possible that issuers may begin offering special cards for use overseas.  It is also possible that countries will stop accepting the magnetic stripe cards in the future.  In the meantime, be prepared when you travel, and keep your ears open for additional changes over time.

For further reading, see US Credit Cards Becoming Outdated, Less Usable Abroad, at CreditCards.com, and US Credit Cards Lost Their Cachet in Europe at Frommers.com.

 

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