Many card issuers have switched to EMV chips, but some still have only magnetic stripes. Does it matter?
Dear Cashing In,
My husband and I will be traveling to Europe for three weeks. We have a USAA Visa credit card and MasterCard debit card. We cannot get a chip from them. I don’t want to travel without one. What do I do? My husband does not want another credit card opened. — Sally
Your question seems simple. But really, it is several questions wrapped into one. To answer it, we need to know a little bit about USAA cards and card use in Europe, then mix in a little bit of relationship advice.
As you know, most European countries long ago switched to cards that contain an EMV chip, which is considered more secure against counterfeit fraud than traditional magnetic stripe cards. The U.S. is in the process of rolling out EMV chip cards, but it is happening slowly.
The good news is you can survive in Europe without a chip card. The most accepted type of card is a chip-and-PIN card — a credit card with an EMV chip that allows you to enter a PIN for added security when the payment terminal requests it. In the U.S., chip-and-PIN cards are rare, as most banks have chosen to go with chip cards that require only a signature, not a PIN. Those cards are also widely accepted in Europe, though perhaps not quite as widely as those with a PIN.
Ironically, USAA is one of the few issuers to offer cards enabled with chip-and-PIN. USAA spokeswoman Gloria Manzano told me that the company has replaced 80 percent of its old cards with chip cards, and the remaining ones are scheduled for replacement by early 2016. She said people who are traveling abroad can call and request a chip card. In online forums, however, customers have said USAA will not replace them even if you call and ask. This seems to mirror your experience.
Many merchants in Europe are still accustomed to serving Americans who show up without chip cards. When I went to Europe in May, some clerks attempted to swipe my card’s magnetic stripe because they thought my card lacked a chip. Big hotels and major restaurants should have no problem accepting your chip-less USAA card. Smaller merchants might not have that flexibility and automated kiosks probably won’t, either.
No matter what kind of card you use, however, it is smart to travel with a backup plan, because no card used overseas is guaranteed to work 100 percent of the time. Usually this means you should carry some cash, just in case — and that’s even more important if you don’t have a chip card. Make sure the issuer of your debit card knows you will be traveling overseas so you can get cash from ATMs if you need it.
Now, about a new credit card. If you worry about your card not working because it lacks a chip, getting a card with a chip is the way to go. Most credit cards with travel rewards have already shifted to chip cards.
For some reason, it sounds as though your husband needs some persuading. Even though you could apply for a card in your name without his approval, that approach might not be healthy for your marriage.
I’m guessing that he worries about having too many credit cards and the effect on credit scores. Though your credit score could suffer a temporary ding when you apply for a new card, in the long run adding a card can help your score because you will have more available credit. As long as you keep your balance low, you will be lowering your credit utilization ratio — which contributes to 30 percent of your score.
Perhaps this information will help: Does he realize that the USAA Visa charges foreign transaction fees? For every purchase you make with it overseas, tack on an additional 1 percent in fees. Fees on the foreign use of debit cards are typically higher, up to 3 percent.
There are any number of travel-reward cards that have chips and no foreign transaction fees, which you can find on this website, among other places. Most of these cards waive their annual fees for the first year. It would make sense to get one. They also tend to come with impressive sign-up bonuses.
However, if you go along with your husband’s insistence on no new cards, you should still be able to get by just fine. Don’t worry too much about it, make backup plans and have a great time.