The Perils of Chip&PIN: Holiday Money Tips for American Tourists in Europe

In spite of a brief, unexpected and serendipitous spell of lovely warm Indian Summer, the UK holiday season is now fast approaching its inevitable, foggy, cold and damp conclusion. An impending visit from my sister, a US resident, has nevertheless prompted me to look again at the holiday cash problems faced by American travellers to Europe.

Chip&PIN is now the universal standard for all credit and debit cards in Europe, and is also being introduced in Canada, but this system has not yet been adopted in the US.  The inconsistency poses some unsettling problems for American tourists abroad:-

• Will the ATM retain my card?
• Will I be able to use my card for making payments in-store or in restaurants?
• Do I need to take loads of cash on holiday with me?

Most US credit and debit cards still work OK in European cashpoints, but check with your bank before you travel. It is also advisable to ring your bank and let them know you are planning to travel to Europe and will be using your card; otherwise you run the risk of having it blocked when the bank’s system detects an unusual spending pattern.  If possible take a second card along with you so that you have back-up if you are unlucky enough to have your card is retained by an ATM. Remember it is always cheaper to use a debit than a credit card for ATM cash withdrawals.

American MasterCard & Visa magnetic stripe credit cards are still widely accepted all over Europe, in ATMs and in stores.  There is normally no problem at all in traditional shops and restaurants, which should still be able to swipe an American card and allow you to sign for your purchase as normal, but you may find problems when trying to pay at unmanned, automated paypoints.  The classic example of this situation is at the petrol pump, but be warned; this type of payment system is on the increase in Europe, and you may get stuck, especially if you are travelling in rural areas. Theatres, cinemas, toll-booths and train stations all over Europe often have automated payment systems which accept Chip&PIN cards only.

What options are available for managing your holiday spending money?

• Use ATMs and cash: but make sure you speak to your bank before you travel.  Avoid  ATMs, normally sited inside shopping malls and stores,  that charge a fee for cash withdrawals
• Ensure you travel with MasterCard or Visa in your wallet. Amex is not so widely accepted in Europe and the UK due to the high rates of commission
• Get a pre-loaded card: Travelex offer something called the Global Passport that can be pre-loaded with either Pounds Sterling or Euros.  This may be useful if you are a frequent traveller, but is rather an expensive option if you are only going to use it once

Well, that’s the theory, but we all know that in this life things don't always go according to plan.  It will be interesting to see how if all this advice actually tallies with my sister’s real-life experiences in the UK over the coming weeks.