Using Credit Cards In Europe: What You Need To Know

Chip and Pin, which are accepted, and everything else related to using credit cards in Europe:

Walkmans. Beepers. Polaroid cameras. These are all things which are a couple of decades past their prime, right? The same can be said about magnetic strip credit cards… they’re an ancient invention which may (or may not) cause problems during your travel. I’ll address that issue and everything else related to using credit cards in Europe so you can be prepared.

1. Chip and Pin

What’s chip and pin? If your guessing it must be some cute nickname for the latest celebrity couple, then you’re in for trouble!

Chip and pin refers to a credit card technology consisting of, well just that… a computer chip and PIN number. Without them, the card won’t function. This security feature was developed in the 90’s and during the 00’s, it was rolled out across most of Europe (and the rest of the world for that matter).

However there are a few countries which haven’t made the switch yet – most notably the United States. So if that’s where you’re from, you may encounter some problems when using your card in Europe:

• A store or restaurant may have to manually type in your credit card number for processing – swiping the magnetic strip won’t work.
• Unfortunately there will be occasions where you won’t be able to use a magnetic card no matter what. The most common places you’ll experience this are ticket kiosks for trains and buses, petrol (gas) stations where you pay at the pump, toll booths, and self-service parking lots.

The lesson? If you’re coming from the US, make sure you carry physical currency for times where your ol’ magnetic strip won’t function. If you don’t mind paying a hefty annual fee, then the credit cards from JP Morgan, Hyatt, and British Airways currently come equipped with chip and pin. Alternately, you can buy a prepaid debit card from Travelex which has this feature.

2. Brand Acceptance

The acceptance of credit card brands varies throughout the world. What’s commonly accepted in Italy or France is quite different from the US or Japan. Regardless of which European country you’re visiting, here’s a rundown of the most common brands and their likely acceptance in the region:

• Visa – As you may recall their slogan is “everywhere you want to be” and that tagline holds true when it comes to acceptance; any place that takes credit cards is almost certainly going to take Visa. They’re the only card accepted at the Olympics, which means those who attend the 2012 London games and others need to keep this in mind.
• MasterCard – As is the case with most countries in the world, acceptance of Visa and MasterCard typically go hand-in-hand. So this is another one you can rely on, excluding the Olympics of course.
• American Express – Because they cost merchants more to process, you will find their acceptance is much lower than in the States. However the major hotels, restaurants and high-end retailers will typically accept them.
• Discover – Try whipping this out at a store in Europe and they will look at you like an alien. The Discover brand is practically unheard of in that part of the world.
• JCB – It may be the go-to card in Japan, but in Europe the acceptance is quite limited.
• Diners Club – A dying brand no doubt, but you can still use it at some tourist destinations, especially those which cater to higher end travellers.

3. Fees

Last but not least, we come to that dreaded four-letter word… fees! No one likes them, but hopefully this information will help you minimize (or eliminate) the fees encountered during your trip to Europe:

• Fees charged by merchants – In countries like the US, Canada, and Australia, you rarely ever come across a business which tries to charge you for the privilege of paying with plastic. In most European countries you won’t encounter this either, but sometimes you will. For example, if you’re perusing the streets of Venice or hitting up a bar in Athens, don’t be surprised if a merchant you buy from charges a fee (either a flat amount or a percentage). The solution? Either try and negotiate or just pay with cash.
• Currency conversion/foreign transaction fees – No matter where you’re from in the world, it’s likely that your bank tacks on a 2-3% surcharge when using your credit card outside your home country. For example, if you make a $100 purchase in Paris, you will see an extra $3 surcharge on your statement. The solution? Ideally, you should try and use a card that doesn’t do this.

  In the US, the only major issuer which doesn’t charge this fee on any of their cards is Capital One. Are you an Aussie? Check out the Bankwest Zero MasterCard. Canadian? Try the Chase Amazon Visa. Regardless of where you live, you can find one. It just may take some Googling.

• Cash Withdrawal Fees – It’s surprising how many people use credit cards at the ATM, because doing so costs and arm and a leg! Not only does interest begin accruing immediately (no grace period) but there are also a slew of fees you will be charged by both the credit card company and the ATM operator. This means you should figure out your cash situation ahead of time – doing that will save you a lot of money!

Friend or foe?

For me, credit cards are a money-saver. After I get to my destination, what I like to do is funnel as many purchases through my card as possible, instead of paying with the local currency. Why? Because my card doesn’t charge a foreign transaction fee and this saves me the expense of using a money changer.

On the flipside, if you’re not aware of all the fees and obstacles, then that piece of plastic will become a real pain in the you-know-what!

Ultimately your credit card can be your best friend… or your worst enemy. If you know how to play the game (and now you do) then it will be a useful tool during your European adventure.

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If you think of anything I left out of this post, please feel free to put that on the comment.