Will My Credit Card Work Overseas?

Credit Card With Chip
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What Is a Chip and PIN Credit Card?

Many countries, including most of western Europe, Japan, Mexico and Brazil, have adopted chip and pin credit card technology, which is said to be more secure than traditional magnetic stripe technology. A chip and PIN credit card, sometimes called a "smart" credit card, features an embedded microchip that requires a personal identification number, or PIN, for use instead of a signature. Chip and PIN credit cards also have a magnetic stripe for use in the US and other countries that have not converted their credit card processors and ATMs to accept input of customers' PINs.

Will My Magnetic Stripe Credit Card Work in a Chip and PIN Country?

Visa and MasterCard require merchants in chip and PIN countries to also accept magnetic stripe credit card payments, which means you should not have a problem using a magnetic stripe or chip and signature credit card at hotels and restaurants.

Problems may occur when you attempt to use magnetic stripe or chip and signature credit cards at unattended payment locations, such as train ticket kiosks, parking lots, bicycle rental stations and tollbooths. Without a person on site to process your magnetic stripe credit card payment, you will not be able to use your credit card at all.

Do Any US Banks Offer Chip and PIN Credit Cards?

In 2015, credit card issuers began providing chip and PIN cards to their US customers. Prior to that time, some US credit unions and banks began testing chip and PIN credit card use with select groups of customers. However, as of this writing, most US chip and PIN cards are not issued with a PIN; you have to request it from your bank or credit card company. This means that these chip and PIN cards are being used as chip and signature cards.

If you plan to travel outside the US, contact your credit card issuer and request a four-digit PIN.

If this option is available through your credit card issuer, it will afford you a higher level of fraud protection.

What About Chip and Signature Cards?

Chip and signature credit cards are protected by microchip technology, but still require a customer signature. Anecdotal reports indicate that users have encountered problems trying to pay with chip and signature cards at unattended payment locations in Europe. At hotels and restaurants, chip and signature cards are readily accepted.

Are Chip and PIN Credit Cards Safer Than Magnetic Stripe Cards?

The big selling point for chip and PIN technology is the increased protection against fraud provided by the card's microchip. In February 2010, Cambridge researchers Ross Anderson, Steven Murdoch, Saar Drimer and Mike Bond announced that chip and PIN credit cards have a safety flaw that can permit a savvy criminal to trick the card reader into thinking a valid PIN has been provided, when in fact, it has not.

If your credit card number is used without your permission, your country's consumer protection laws may limit your liability. For example, in the US, Regulation E protects consumers from liability for electronic theft from their bank accounts, limiting liability to $50 if the theft is reported within two business days.

In the UK, banks must reimburse customers for fraudulent transactions, but a loophole in the law that allows banks to avoid reimbursement if "gross negligence" can be proven is often used to the banks' advantage, according to UK financial website This is Money.

Are There Alternatives to Chip and PIN Credit Cards?

If you are traveling to a chip and PIN country and do not have a chip and PIN credit card, you can still buy goods and services. You will need to plan ahead and be prepared to use one of these payment methods:

Cash, which you can obtain from an automated teller machine using your debit card;

Prepaid currency cards, such as the Travelex Multi-Currency Cash Passport;

American Express cards, which have been known to work at bicycle rental kiosks and other unattended payment stations in Europe;

Pre-ordered train tickets, Metro passes, museum tickets, and toll cards. You can order many of these items from home before you leave on your trip.

Will My Chip and PIN Credit Card Work in a Magnetic Stripe Country?

It should, although you may encounter problems at gas station pumps and other unattended locations that require you to enter a US ZIP code to complete your transaction. At some locations, you can enter "99999" instead of a real ZIP code, and your transaction will go through. At others, you will need to ask an employee to process your payment.