For whatever reason the United States has been behind the rest of the world when it comes to credit card transactions. For many years now other countries have used a Chip and Pin system when processing credit card transactions. The United States however has stuck to the traditional swipe method. Recently, the US has switched to a chip based transaction system which should make using a us credit card for international travel simpler, but on a recent trip to Europe I found the process more difficult than expected.
Chip and Pin Technology
International credit and debit cards use a Chip and Pin system for processing credit card transactions. The process is simple. When paying at a register you simply place your card in the reader and enter your pin. When at a restaurant a portable card reader is brought to the table and the process is repeated. Overall, it works extremely well. The entire process works exactly like a traditional debit card in the US.
Chip and Signature Technology
In the US, majority of major credit card issuers decided to use a chip and signature technology. The process should work something like this: When you insert the card a transaction is initiated. Then you are required to physically sign a receipt. The teller is then supposed to compare the signature on the back of the card to the signature on the receipt to authenticity. Again, this is how the process is supposed to work. In reality, I have never been asked to see the back of my credit card when completing a transaction in the United States.
Using A US Based Bank Credit Card For International Travel
This brings us to the problem… In years past when traveling internationally I always order the country’s currency before leaving. Ordering the currency is easy enough, but it was always difficult to guess how much money I need. If I had money remaining, depending on how much, I would find myself making somewhat stupid purchases to avoid visiting a currency exchange. Keep in mind, most currency exchanges (especially in airports) take a pretty large de facto transaction fee between currencies.
So, this time I decided I would go cashless. For the first time I would spend the long weekend using only credit cards. I called each credit card issuer to notify them of my travel plans. Almost immediately upon landing I realized I was in over my head. When making a transaction, you insert the chip into the card reader and wait… then, the clerk realizes you have a chip and signature credit card. You are then presented with a receipt to sign and asked to hand over the credit card for verification.
The entire process simply took longer than when making purchases domestically. Also, I find that the ink used to sign the back of my credit cards tends to wipe off easily. So, when the clerk attempts to compare signatures they are stumped to find the back of the card empty. Also, generally when I sign receipts, the signature looks nothing like the proper signature I used on the back of a credit card. One more than one occasion I was asked by the teller for a form of identification. Keep in mind, majority of these transactions were typical <$20 charges, not huge purchases.
Is It Worth It?
Obviously these issues are minor and by no means ruined my weekend. I personally like to use a credit card for ALL transactions because of the points earning potential. Going into my trip I realized I was taking a risk not taking any cash, but I think it paid off. It is nice to know that I can travel internationally without taking cash. If I were to do it again, I would probably take $100 worth of foreign currency for incidentals (water, canned beer, candy, coffee, etc.) but still stuck to my strategy to use credit cards for majority of transactions.
Final Thoughts
I personally don’t understand why the US has chosen to be different than the rest of the world. I wonder how easy it would be for someone to steal a card and duplicate the signature on the back compared to knowing the pin number on the card. To me, it seems like a chip and pin would be significantly more secure and convenient in the long run.
The worst part of the whole experience was seeing how obsolete the chip technology is now. I was with some locals who all had contactless credit cards. When waiters brought out the scanner, only a simple tap was needed to pay. It seems funny that the US is now getting chip cards when other countries are moving to contactless cards.
