In last week's On the Spot column, letter writer Nancy Jones said she was going to London and expressed concern about whether her credit cards would work because they are not Chip and PIN (personal identification number). She said she didn't want to carry a load of cash. What should she do? It turned out to be a more complicated answer than I expected, but I did find a card that I think will work.
The issue with many U.S. credit cards is that they use a magnetic stripe. In many parts of Europe, Asia and Latin America, the standard is a smart card or EMV, short for Europay, MasterCard and Visa. Many of those cards use a PIN.
U.S. cards are beginning to come with a smart chip, but they often are Chip and Signature cards — that is, instead of using a PIN, you sign your card slip and the signatures are compared. David Hogan, executive director with Heartland Payment Systems, one of the largest credit-card processors in the U.S., told me a prominent retailer told him, "'Dave, can't remember the last time we hired a handwriting expert.'"
The experts I spoke with said a Chip and PIN card was more secure.
Before you begin your quest for such a card, let me note that I've used my magnetic stripe card in Europe and Asia within the last year and had issues only once — at the unmanned London Tube kiosk at Paddington Station — and a request for a smart card with a PIN only once when I was making a purchase at a mobile phone store.
So before I made myself crazy, I decided to follow the advice of Seth Eisen, a vice president at MasterCard: He suggested checking your credit cards and calling to see whether they were smart cards.
The results: None of the cards I carry (American Express, Visa and MasterCard) has the chip. One card company told me it could give me a PIN but also said the card would act like a cash advance card, and I would start accruing big interest and transaction charges right away. That is not what I wanted.
I began perusing the list from FlyerTalk Forum at http://www.lat.ms/11cj2HB. Some credit unions are listed; you can join them and then get the Chip and PIN card. But then I spotted USAA. I started the process to see whether I could become a member (my father served in the U.S. Navy). My membership wasn't going through, so I called and explained that I wanted to join. I didn't qualify. I told the agent I didn't really want to join; I wanted a Chip and PIN credit card.
"You don't have to be a member to do that," she said. She took my application over the phone, approved me on the spot and in eight days, I had the card in my hand. I registered it with a PIN number. There is no annual fee, and the foreign transaction fee is 1%.
I'm not shilling for USAA, but after many, many phone calls, it was the first company that had what I needed. Readers, if you have a Chip and PIN card, I hope you'll tell me about it by writing to email@example.com.
I may never need the card, but to me, having it is like having the correct charging plug for my cellphones, laptop and cameras: You need it when you need it.
Travelers who go abroad need to have alternatives — money tools, I call them — in case they get into a jam. Cash works (U.S. plus the small amount of foreign currency you'll change before you go); sometimes, traveler's checks work. Debit cards used in ATMs usually work, although you may incur foreign transaction fees. Magnetic stripe cards often work, but again, watch out for those fees. And sometimes a smart card with a PIN will work, but you can run into problems using it for online purchases.
As technology changes, this discussion may become moot. "Some places might skip the PIN-versus-Signature debate altogether," said Rick Clemmer, chief executive of NXP Semiconductors, whose chips are used in cards and passports. They'll go to a smartphone that uses NFC, or near field communications, and provides a "contactless" purchase experience.
Think that's way in the future? When we spoke, Clemmer told me he had just used his NFC-enabled phone at a Starbucks in Phoenix; the transaction was recorded and he received a receipt on his phone. By 2015, he said, "50% of the smart phones will have NFC capabilities"— as many as 1.5 billion units.
Something that's seamless, secure and knows no boundaries will be a welcome relief after this credit-card muddle. Until then, keep all your money tools handy for your foreign adventure.
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