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Reader Jana writes in to say
Since we are spending 3 weeks overseas this year I am looking to add a credit card that does not charge foreign transaction fees and has chip and PIN enabled. I am thinking of the Chase Sapphire Preferred Card or the Capital One Venture Rewards card. What do you think?
What is a “chip” (EMV) card?
Chip and PIN cards have been commonplace in Europe for several years, but Chip and PIN cards have been coming to the United States over the past few months. Instead of (or in some cases, in addition to) having a magnetic stripe on the back of the card, there is a chip on the front of the card (see image below)
When you’re ready to pay, instead of sliding your card (as you’re probably used to), with a chip and PIN card, you put the card into the reader (with the chip side in the reader), and leave it in there while the reader checks the card (and makes sure you’re authorized).
Many retailers have started rolling out the new chip enabled credit card terminals – I know I’ve seen them at Target for example.
The big reason we’re hearing more and more about chip and PIN cards is that as of October 1, 2015, the fraud burden of liability is shifting. Whereas before all fraud liability rested with the issuing banks, now if there is fraud committed at a retailer who is not using an EMV / chip terminal, the fraud liability is with the RETAILER!
US Chip and Signature enabled cards
Most cards in the US are not Chip and PIN cards, but instead Chip and Signature cards. With a Chip and Signature card, your card has an EMV chip inside it, but after you insert your EMV card into the terminal, you still sign a credit card slip
With a chip and PIN card, after you use the credit card terminal, instead of signing a paper slip, you enter in your 4 digit PIN as your confirmation / authorization
Note that this kind of increased security doesn’t really help you with online fraud
US Chip and PIN cards
The US is still several years behind Europe with Chip and PIN cards, so while there are starting to be more and more cards that have a chip installed, most of them are still chip and signature cards rather than chip and PIN cards.
With our upcoming trip to Europe, I wanted to make sure to get a card that had Chip and PIN functionality. While most places in Europe that take credit cards will do chip and signature, I knew at places like automated ticket kiosks you need a chip and PIN card. And in fact, while we were there, the only time we ended up needing the chip and PIN functionality was adding money to our Oyster card on the London Underground.
Chip and Pin cards with no foreign transaction fees
Many cards charge a fee (usually at least 3%) for any transactions in a foreign currency. So, if you’re heading to Europe, you want to avoid those cards that charge foreign transaction fees!
The only card that many miles and points folks might have that I saw was the Barclay Arrival Plus card. Widely panned when they gutted the rewards system, we still had one (I canceled mine but my wife’s anniversary had already passed so she’s good for another year). It’s still worth getting one for the signup bonus but I wouldn’t put any spend on it – though it comes in handy for its chip and PIN functionality.
Here’s a list of the cards with no foreign transaction fee that I have links for – though there are others. (If you apply for any card through this link, I do receive a commission)
Setting the PIN on my Barclay Arrival Plus Chip and PIN card
Since the Barclay Arrival Plus card was my only Chip and PIN card, I made sure that it was in my wallet for our trip to Europe, just in case I needed it. Before I went, I went online to setup the PIN. On the main account page, there was a place to set up the PIN
Clicking on that link takes you to the “Manage your PIN” screen
After you enter in your PIN, you get a confirmation page
And that’s it! Your Chip and PIN card is set up to use (and I can confirm that it did work for us in London). With Chip and PIN cards becoming more and more prevalent, you’ll definitely want to become more familiar with what they are and how they work!
Any tips on chip and PIN cards? Leave them in the comments!