The future has finally arrived — or at least the first wave of progress. Just before I left on my Asia trip, I got a FlexPerks Visa card from U.S. Bank that has a chip and a magnetic stripe, 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 FOREIGN TRANSACTION FEE 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, like the American Express Delta SkyMiles card, and the ones that don’t often have high annual fees, like the Chase British Airways Visa ($95 per year). 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.
Cash for globe trotters