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Credit Card Chips: What You Must Know When Traveling Internationally


Many learn the hard way when traveling internationally that our U.S.-based credit cards may not be accepted everywhere.  I learned expensive lessons when I didn’t have the ‘right’ credit card.  This article will help you avoid confusion, lost time, and money, along with the experience of being yelled at by intimidating fully-armed French policemen when your U.S. credit card doesn’t work as you expect.

Credit card issuers in the United States utilize magnetic stripe cards as their standard. Across the globe, especially Europe and increasingly Asia, many popular tourist destinations have adopted more modern technology known technically as EMV (Europay, MasterCard and Visa) but usually referred to as Chip-and-PIN. This standard uses microprocessor chip-based cards instead of magnetic stripes.

Chip-and-PIN versus Chip-and-Signature Credit Cards

Chip-and-PIN credit cards are largely considered the most secure technology available in the credit card industry.  Instead of utilizing a stripe and signature to confirm the cardholder’s identity, a chip and four-digit personal identification number (PIN) must be entered for the transaction to be successfully processed. While chip-and-signature cards also have a computer chip embedded into the card, identity verification is accomplished by cardholder signature.

Having chips embedded into the credit cards makes them far more difficult for thieves to duplicate. If your credit card ever falls into the wrong hands, using it becomes much more difficult with the chip-and-PIN cards because of encoded transaction information, and PIN numbers can be changed very quickly.  Chip-and-signature cards are less secure because merchants rarely ask for additional identification to confirm the signature, though the embedded chip still makes them far more secure than magnetic stripe cards.

Note, however, that the chip-and-signature is not necessarily accepted everywhere.  While generally not a problem with hotels and most restaurants, other locations may be disappointing.  For example, some kiosks and local businesses only accept chip-and-PIN.  For U.S. travelers, this becomes trial by error.

When will U.S. Credit Card Issuers Offer Chip-Based Cards?

Chip-based cards have been in use globally for a decade but the technology has only recently been introduced into the U.S. market.  But if this EMV technology is better than magnetic stripe, why don’t all U.S. issuers use it?  One word: Cost.  It is expensive to convert all credit cards to chips, presumably more than issuers and merchants believe they will save in fraudulent purchases.

However, that thinking may be changing. The recent announcements of major security breaches at Target, Neiman Marcus, and hotelier White Lodging (Hilton, Marriott, Starwood properties) affecting millions of consumers may have some recognizing the need to step up security sooner rather than later.  Let’s hope so.

Despite the cost, eventually we will have chip-based cards anyway because all the major credit card issuers (Visa, M/C, AmEx, Discover) are offering an incentive to convert from magnetic stripe. Bank card sponsors and merchants who do not convert to EMV cards and terminals by October 2015 will see the financial burden shift to them for fraudulent purchases.

Some U.S. issuers offer chip-based cards now but it is difficult to compile a list because it changes daily.  For example, American Express now offers them but it is available only on select cards today and you have to specifically request a chip-based card.  Same is true for Chase and others. If you will be traveling internationally, best to check with your credit card companies to see if your specific cards are available.


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