Credit Card Tips For Travellers
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This guest post comes from Andy, a young professional who went back to graduate school a little later than most, a Vosa Insider, an avid reader and an aspiring personal finance writer.

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Credit Card Tips For TravellersAs a grad student I lived in another city for four years, but maintained my residency back home.

Even though I had notified my credit card company time and time again, on a semi-regular basis I would be at the grocery store and have my credit card declined due to a fraud alert.

People run into this from time to time. The non-car-owner buying $10 of gas for the vacation rental car, anything that is out of the ordinary that can raise a red flag.

Welcome to the high-tech enterprise of credit card security. It is an ongoing battle between fraudsters and criminals against Visa, MasterCard and the other credit card companies. Not to mention the poor cardholder who gets caught in the middle of it!

In this article, we are going to go over some of the Do’s and Don’ts of using credit cards while traveling overseas.

Avoid a freeze on your credit card – what you do not know

Most people know that when you’re traveling you should call your credit card company and bank before a trip to a new country so your purchase in Bangledesh, Iceland or Mexico does not trigger an automatic fraud alert and freeze your account.

Banks use automated pattern recognition to monitor normal, or “average” spending habits, and then look for deviation from these known behaviours. For example, the location of the purchase coupled with the time of purchase. If you have a string of purchases in your home neighbourhood, then suddenly a purchase in another country, that can trigger the fraud alert software.

As credit card fraud is becoming more of a common occurrence, more and more banks are starting to recommend to cardholders to notify their bank if traveling to another province or state within your home country.

Another thing credit card companies look for is patterns of purchase locations common to criminals. These often are automatic merchants, such as gas bars, online purchases, vending machines, and places where a teller is not there to verify the card.

An important point to note for anyone traveling is to carry more than one card. Do not go overboard, but consider having two good credit cards, in the event that one card is declined due to fraud prevention measures. Especially if traveling abroad, overseas, it can be much more difficult to unfreeze a card without a cell phone.

What you need to know about chip & PIN credit cards

As many Americans are starting to notice, many countries such as Canada, Europe, Japan, Mexico and other nations have been using credit cards with a chip on them. This chip requires customers to enter their PIN to complete the purchase, rather than a signature with the (soon becoming) antiquated magnetic strip on the back of the cards used in the United States.

Merchants that accept MasterCard, American Express, or Visa are required to let customers pay with either type of card, the PIN Chip or magnetic strip. However, as the magnetic strip are uncommon outside of the USA, some merchants are unclear how to process the magnetic strip Visa cards.

Generally speaking, the automated kiosks that only accept PIN Chip cards, especially in European train stations, airports, parking garages, gas stations and some tollbooths. What one needs to do then is look for the customer service, as people without PIN Chip cards need to wait in line and pay manually.

Chase British Airways Visa Signature Credit CardAs a warning, these lines can be very long, slow, and frustrating when you a missing your train. We recommend applying for a chip card, like the British Airways Visa Signature card with a 50,000 point bonus, before you go as well as carrying enough cash to pay without having to use your card and wait in line.

This is actually far more of a problem than people realize. Recent financial research founds that almost 50% of Americans traveling overseas in the last five years have had some problem using their credit card or debit card. Just over 15% of these people said their card was rejected outright because of the issue of the card having a magnetic strip rather than the PIN Chip. So do not make the assumption just because you can use the card here at home that you will have worry-free credit card usage when overseas.

PIN Chip cards in the USA?

While convenient, issuing new cards, replacing merchant terminals and implementing new systems is very much a challenge, especially given the recent financial times of the banks.

One financial institution that is moving towards change is the United Nationals Federal Credit Union which stated it plans to offer cardholder members with both a PIN Chip and magnetic stripe by the end of the year. The reason for that, they say, is with Canada and Mexico now using PIN Chip cards, along with Europe it is more than time to make the switch. Additionally, the PIN feature makes the card more secure and cuts down on credit card fraud, saving the bank overall money in the long term.

Despite these benefits of a chip, it doesn’t appear that the major credit card companies, aside from a few, have plans to offer the PIN chip in the near future to American credit card holders.  Yet, for some reason, these same card issuers offer the PIN chip to their overseas and international customers. MasterCard and Visa look to ongoing customer satisfaction studies, making sure the PIN chip technology works for customers who travel internationally.

It should be pointed out, the magnetic strip credit cards can still be used overseas. Even if the merchant clerk says that they cannot, if a credit card holder insists, yes they can swipe the card still. This is easier said than done though, as in practice explaining that to a store owner who does not speak English can pose more of a problem, especially when visiting less tourist frequented areas or more rural areas.


Afterword by Brent: There are a few more US-based credit cards being offered with the chip and PIN option and the best news is that all three I highly below have amazing sign up bonuses right now!  Here are the best chip and PIN cards for travelers:

1. British Airways Visa Signature Card

Chase British Airways Visa Signature Credit CardAt first glance you might think that earning 50,000 bonus point on British Airways doesn’t sound like a great deal since you don’t fly British Airways but, rest assured, that this is an excellent card for travel and the sign up bonus.  You can redeem the points with American Airlines for domestic flights in the USA.

The chip and PIN technology not only works worldwide but you also don’t have to pay any foreign transaction fees on purchases made abroad.

Right now, you will earn 25,000 bonus point the first time you use your new card and an additional 25,000 bonus points after you spent $2,500 in the first 90 days.  Plus you will earn 2.5 point for every dollar spent on British Airways purchases and 1.25 points for every dollar spent on all other purchases which is 25% more than you normally do.  This card has a $95 annual membership fee.

Use this link to earn the 50,000 bonus points at British Airways 

2. Citi Hilton HHonors Reserve Card

Citi Hilton HHonros Reserve Credit CardIf you enjoy the status that comes along with being a frequent traveler then you’re going to love that you’ll automatically enjoy a complimentary bump to HHonors Gold status when you get approved for this card.  Additionally you will earn two free weekend nights as a signup bonus when you spend $2,500 in the first four months.

The chip and PIN technology not only works worldwide but you also don’t have to pay any foreign transaction fees on purchases made abroad.

If you spend $10,000-$39,999 in your cardmembership year then you will earn one additional weekend night for free.  If you spend $40,000 or more per year you will also enjoy a free upgrade to HHonors Diamond status.

The point earns on this card are quite good, especially when you’re staying at Hilton HHonors portfolio of hotels.  When paying to stay at a HHonors eligible hotel you will earn 10 points per dollar spent.  You will also earn 5 points for each dollar spent on airline tickets and car rentals.  You will also earn 3 points for every dollar spent on other purchases.  This card has a $95  annual membership fee.

This is the link you will want to use to earn your 2 free weekend nights

3. Marriott Rewards Visa Signature Card

Chase Marriott Rewards Bonus Points Credit CardGet 7 free nights at a category 1 location when you earn the 50,000 bonus points by spending only $1,000 in the first three months of receiving your Marriott Rewards Visa Signature Card.  That’s an entire week!

The chip and PIN technology not only works worldwide but you also don’t have to pay any foreign transaction fees on purchases made abroad.

You will earn 5 points for every dollar you spend at any one of the 3,600+ qualifying Marriott hotels.  2 points for every dollar spend directly at the airlines, rental cars and restraints and 1 point for every dollar spent elsewhere.  This card has an $85 annual membership year that is waived in the first year and is offset by an additional free night at a category 1-5 location each year of your membership.

Use this link to earn the 50,000 bonus points at Marriott

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