Credit-card tips for travelers
Credit cards and ATMs may have eased the challenge of spending and exchanging money on a trip abroad, but that doesn't mean we don't occasionally...
The New York Times
Credit cards and ATMs may have eased the challenge of spending and exchanging money on a trip abroad, but that doesn't mean we don't occasionally find ourselves in a foreign country, fuming in front of machines that have just rejected our plastic cards. Fortunately, American banks have recently begun issuing credit cards that are more widely accepted around the world.
Here are some tips on managing your cards and cash aboard:
Get a credit card
with a chip
Many globe-trotting travelers have discovered that American credit cards, with their outdated magnetic stripes, are not always accepted now that most of the world has shifted to cards that use a smart chip instead.
While merchants in Asia, Europe and elsewhere are supposed to be able to swipe our vintage plastic, many automated kiosks can't do that, which can be a problem at train stations, subways and gas stations.
The future has finally arrived — or at least the first wave of progress. Just before I left on a trip to Asia I got a FlexPerks Visa card with a chip and a magnetic stripe from U.S. Bank, one of a growing number of American credit cards that now offer a "chip and signature" option. This isn't entirely a solution because the global standard is "chip and PIN" technology, meaning you enter a PIN, or security code, after a payment terminal reads the card's chip.
When I called U.S. Bank before my trip, I was told that I could get a PIN, but that any purchase using this code would be treated like a cash advance with 21 percent interest — obviously, not an option. Fortunately, the card worked fine when I used it without a PIN to buy a train ticket from an automated kiosk in Hong Kong.
As I later learned, even without a PIN, a chip-and-signature card will work at most automated kiosks around the world because a signature is not required for purchases under $50. And at payment terminals used by stores and restaurants, the chip essentially tells the machine, "This card doesn't have a PIN, so spit out a receipt for the customer to sign."
The annual fee on my card is $49. Other chip-and-signature cards with annual fees under $100 include three options from Chase — the J.P. Morgan Select Visa, the British Airways Visa and the Hyatt Visa — and Citi Thank You or Executive/AAdvantage MasterCards.
For a more complete list, visit FlyerTalk.com and search for "chip and signature" cards; the frequent fliers who trade tips there keep a running list of these cards and their annual fees.
Check your card's
Another consideration is whether your credit-card issuer charges a foreign-transaction fee — usually 1 to 3 percent of every purchase, including the 1 percent Visa or MasterCard fee that banks pass along to their customers. But now that the government requires card issuers to disclose these fees clearly, some companies have gotten rid of them.
The personal-finance site NerdWallet.com lists dozens of cards that do not charge a foreign-transaction fee, including all of the credit cards issued by Capital One (which bucked this trend long before other banks).
Alas, many of the credit cards that travelers use because they earn frequent-flier miles still impose this charge, such as the American Express Delta SkyMiles card. But unless you travel abroad frequently or spend a lot on your credit card, it's probably not worth paying a high annual fee to avoid this charge. Since most of my hotels were billed in dollars with no fees, and I paid cash for most purchases, I paid only $10 in foreign-transaction fees during my trip.
Tell your bank where
Before I left for Asia, I made four phone calls to let my bank and credit-card companies know that I would be traveling abroad — a step banks advise customers to take so an unusual spending pattern doesn't trigger a fraud alert. As I waited on hold after working through the automated-phone menu, I wondered why banks don't make this chore easier and offer a travel-notification tool online.
It turns out, some do. Jim Bruene, who blogs at Netbanker.com, posted the results of an informal test he conducted, finding it took him about a minute each to register travel notifications online with Capital One and Chase, and seven to 10 minutes to do it over the phone with Wells Fargo and U.S. Bank.
Learn the exchange rate
before you land
Every time I travel abroad, I stumble off the aircraft, find an ATM in the airport, press the button for English and get stumped when I'm asked, "How many yen (or pesos, or Brazilian real) do you want?" You can't tell the machine, "Give me the equivalent of $200."
After landing in Tokyo, I had to cancel the transaction and find a billboard down the hall with the current exchange rate; since $250 is about 20,000 yen, I had panicked about entering such a high number in a fog of jet lag at the ATM.
Save yourself that anxiety by visiting a currency-conversion site like xe.com before your trip and writing down how much you want to withdraw once you land.