There are two big frustrations with using credit cards when traveling abroad: nasty foreign transaction fees and not having your card accepted because it doesn’t have an EMV ‘chip’ built-in.
If you travel to Europe frequently you’re probably used to the hassle, thanks to Europe’s wide use of the ‘Chip + PIN’ method of accepting credit card transactions.
Many European merchants and vending machines won’t accept a signature or personal ID as verification of a credit card transaction. So in order to use a credit card with these merchants you need a credit card that has an EMV chip built-in *and* a PIN associated with it.
There are a good number of U.S. credit cards that have an EMV chip, but nearly all still rely on you signing a receipt to verify, because they don’t have the additional PIN based verification system.
That’s not good enough because you could still be stuck unable to use your cards at some vendors, especially automated kiosks that only accept a transaction with a PIN. That’s because kiosks don’t have a human to verify your signature. And some shops and restaurants may refuse a signature-only transaction.
To make matters worse, among the cards that do offer the PIN option, most charge foreign transaction fees of 1-3% on all foreign purchases, which shouldn’t be a price to pay for convenience.
Instead, ignore the noise and focus on these cards that have a PIN option so you can use them at kiosks and not worry about foreign transaction fees. Most however will default to asking for a signature if it’s available, for example at stores and restaurants where an attendant is present.
State Department Federal Credit Union EMV Visa Platinum
No annual fee. Join the American Consumer Council – free – link here to be eligible for the credit union.
Barclaycard Arrival Plus World Elite MasterCard
$89 annual fee, waived the first year.
Diners Club Premier
$95 annual fee. Earns points that transfer to Alaska, Delta, and several other airlines. PIN priority – will always default to a PIN transaction when available for maximum security.
Diners Club Card Elite
$300 annual fee. PIN priority – will always default to a PIN transaction when available for maximum security.
Hawaiian Airlines World Elite MasterCard
$89 annual fee.
Wells Fargo Propel World American Express Card
$175 annual fee, waived the first year.
These UN cards have small 1% foreign transaction fees
UN Federal Credit Union Elite
$50 annual fee. PIN priority – will always default to a PIN transaction when available for maximum security. Join the UNA-USA for $25 to be eligible for the credit union.
Chase is planning to introduce PIN capability on its cards with EMV chips later this year. One caveat to each of the above cards is that they default to signature verification first. So if you’re at a restaurant that has a person to verify a signature it will use that method instead of asking for a PIN. That’s fine for most situations, but some establishments may refuse to process your charge because they only want PIN based verification. Unfortunately there is no way to override the terminal to force a PIN transaction at manned locations. But of all the issues with Chip / PIN this is probably the least frequent.
USAA’s MasterCards are among the few that offer cards that are purely Chip + PIN with no signature priority, but they all levy 1% foreign transaction fees, which aren’t worth it in our opinion.
There are also many Chip and Signature cards available to you with no foreign transaction fees. They won’t help you at kiosks, but they can be helpful at places that won’t read the old style magnetic stripe.
There are many other Chip and Signature cards that charge foreign transaction fees. We think those should be avoided with so many options available that waive the foreign fees.
A constantly updated discussion of Chip based credit cards is on FlyerTalk.com.
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