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Can I Use My Credit Card While Traveling?

October 18, 2011
Foreign Currency

Photo credit: Grant Cochrane

Being in the travel business is often fraught with challenges, it’s not as simple as it looks.  You have to be conversant with many other fields which are indirectly affiliated with the world of travel.  One of the most frequently asked questions we get from travelers going outside of the US is “what’s the best way to deal with currency issues while abroad?”.

Fortunately it’s a lot easier than it used to be prior to the Euro.  Most of Europe (exceptions are Czech Rep, Denmark, Hungary, Norway, Poland, Russia, Sweden, Switzerland, Turkey and the UK) uses the Euro, limiting having to change with each border crossing.

It is possible to convert dollars at home before departure but the exchange rate is poor.  The most effective way to get cash is generally an ATM.  But you need to be careful with your choice of credit cards as they vary in fees.  Cards with the lowest fees include Capital One, HSBC premier and Citigold.  There are also daily limits as to how much you can withdraw.  It’s  a good idea to check with your credit card company as to their foreign transaction fees as well as alert them that you will be traveling—so they don’t deny your card as being suspicious when charges from another country start appearing.

I personally prefer to change money on arrival at my destination.  There’s always a local bank located just outside the customs area and a takes but a few minutes to convert US dollars to Euros or other local currency.  Be sure to request small denominations so you’re not attempting to tip the driver with a hundred euro bill! These days most travel arrangements are prepaid to take advantage of special offers so additional cash requirements are minimal.

A looming predicament for the US credit card industry is the advent of EMV cards in Europe.  EMV is an acronym for Europay, Mastercard and Visa and is also known as “smart card” or “chip and pin card”.and employ a different technology than our magnetic strip cards.  Their point of sales terminals can not process the magnetic strip cards.  Imagine how distressing it would be when you find yourself parked in a non-attended parking lot whose card swiper only accepts EMV cards and there’s no way to get out!  Or driving down the autobahn, about to run out of gas and the next gas station only accepts EMV, could be a real bummer.  We’ll keep you posted on this scenario.


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