Using Credit Cards Overseas Roundup

April 10, 2011

If you read about the British Airways card free flight offer yesterday and were thinking of using your card on your trip you might be interested in an email I recieved from a reader named JT.

About a month ago after we covered the features of the American Express Expresspay cards, I got an email from JT that suggested I cover a new type of credit card technology.  Here’s what he said:

“I guess the AE Expresspay card is convenient, but what would be much more convenient is adoption in the US of chip and PIN cards, what they now have in Europe.  It is getting harder and harder for travelers to Europe to use American-style magnetic stripe cards, and the AE Expresspay card, with an RFID device, is unheard of there. How about advocating a switch to chip and PIN cards instead?”

Chip and PIN

I haven’t traveled to Europe in a while so I wasn’t aware of this new technology.  I did some research and it looks like Chip and PIN cards are a new smartcard that have been rolled out in England and other European countries.

They don’t rely only on the magnetic strip and the signature of the card owner to process and approve the transaction. Instead, the system uses a chip in your card and a PIN number that you enter to prove that you’re an authorized user of the card.

It sounds like the changes were made in an effort to reduce credit card fraud, which had become a major issue in Europe. Policies were changed to pass the liability of fraudulent transactions onto the bank, so banks made a big push to have consumers begin using the Chip and PIN system.

Credit Cards Overseas

I wrote JT back asking if he could go into a little more detail about the problems he’s experienced with his card in Europe and if he’s ever seen Chip and PIN in the US.  He was actually overseas when he got my email, on the start of another European trip. Here’s what his experience has been:

“It is still possible for Americans and others with magnetic stripe credit cards to use them, but only in attended locations.  That is, when you’re faced with train ticket vending machines, automated highway toll booths, and automated gas station, you better have cash as these machines are almost exclusively chip & PIN, especially in France and Germany. 


And in today’s increasing automation, it’s harder and harder to find attended locations — that is, real live agents at service windows.  I haven’t run into any problems yet, having arrived in Europe just yesterday on this trip, but I’m glad I’m aware of this barrier for Americans.

I have heard that one credit union open to UN employees in New York offers chip and PIN credit cards, but am not aware of other US institutions.  I hope more banks in the US start to offer them, as I cannot conceive of the lack of universality — once again, the US falls behind in technology.”

Not being able to use your credit card would be a little different than I’m used to. There are some stores that don’t accept credit cards, mostly local businesses, because credit card fees eat into their profits.  Usually I don’t notice they don’t take credit until I get up to the register and then have to dig through my wallet to see if I have any cash.

There have been a few cases like this when I ended up leaving the store without what I was there to buy since I didn’t have any cash.  It’s never been a big deal, just kind of inconvenient.  However, if you were overseas and counting on your credit card to work – but then weren’t able to use it – that could be a big problem.  So, if you are traveling to Europe, make sure to bring some extra cash along in case you encounter a place that only takes Chip and PIN.

Has anyone else experienced issues using their credit cards overseas?  Is so be sure to share what you learned in the comment section.  Finally, here are some personal finance articles from this week that you might want to check out.

Personal Finance



Thanks to Funny About Money and Money Beagle for including my posts in the Carnival of Personal Finance. Also to Kay Bell for including Online Brokerages Tax Software & Training in the latest Carnival of Taxes!


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Ben Edwards, the founder of Money Smart Life, saved up enough to buy a Nintendo back when he was 12 years old. When he used the money to buy shares of Wal-Mart stock instead, he knew he wasn't like the other kids... His addiction to personal finance has paid off for his family and now he's helping you to afford the life that you want. Check him out on the web at Google Plus, Twitter and Facebook.

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3 Responses to Using Credit Cards Overseas Roundup

  • Ken


    This is not just Europe. In fact, the US is the lone standout in its steadfast reluctance to move over to the Chip & PIN standard. Canada made the switch last year and are planning to ban the use of mag-stripes by next year. Mexico the same. Brazil, India, Nigeria, Japan, China, Hong Kong, you name it, they’re all making the switch.

    The mag-stripe on our cards are based on fifty year old technology that by today’s standards is ancient. Any crook with $300 worth of equipment off of eBay can make a perfect clone of your card without you ever knowing it. These card skimming frauds has been on the rise in many places in the world that it caused headaches for everyone so they began moving over to the Chip & PIN standard. These Chip & PIN cards still retain the mag-stripe as you have people from those countries visiting the US which still relies on the swipe and sign, but they’d like to get rid of it altogether because it’s too much of a risk. But at least they have two ways to pay: swipe and sign in the US or Chip & PIN in their countries on the same card. Americans don’t have that option as banks in the US only issue cards that have the mag-stripe only so we get screwed in when we travel abroad.

    • Ben

      @Ken, I didn’t realize it was an international change that only the US has avoided, thanks for pointing that out. Sounds like having a card with both a mag-stripe and Chip & Pin would be a good option right now.

  • Joe Plemon

    Thanks for the mention! Greatly appreciated.