Traveling Abroad: Should You Get an EMV Credit Card?
Thinking about getting an EMV credit card? Smart choice. For international travelers, EMV cards are an invaluable tool. America, stubborn as the day is long, has fallen far behind the trend, but we’re learning. Over the past year, dozens of EMV cards have sprung up across the US market. With Chase and Wells Fargo blazing the trail, America is finally breaking into new payment technology frontiers. Here’s a look at why you need an EMV card and which are worth your consideration.
Why get an EMV card?
Let’s start with the basics. Americans primarily use magnetic stripe, or “magstripe,” credit cards. Magstripes aren’t exclusive to America, but most of the world has doesn’t rely on them exclusively as we do. Instead, other nations use EMV credit cards. EMV cards do have a magnetic stripe on the back, but they also contain a microchip embedded in the plastic.
The difference between magstripe and EMV cards is mainly a matter of security. EMV chips are more fortified against fraudsters and scam artists. Whereas magstripes contain static, unchanging payment information, EMV chips encode data differently with every transaction. It’s immensely more difficult for thieves to skim your card’s information.
Unfortunately, EMV and magstripe cards require different payment terminals. You can’t swipe an EMV card through a magstripe reader, and you can’t stick a magstripe card into an EMV slot (though some payment devices are equipped for both). This is where complications arise. Americans traveling overseas often encounter difficulty when making credit card purchases. Merchants, especially outside of tourist hubs, aren’t always able to accept magstripe cards.
How to use your EMV credit card
Now you know why EMV cards are more secure than their magstripe counterparts, but how do you use a card with EMV technology? It’s really simple! Insert your card into the terminal, chip first. Your impulse will be to insert the card and remove it quickly. Resist this! Instead, you’ll leave your card in until the receipt starts printing. In the meantime, you’ll follow the prompts on the terminal screen, which will include instructions to sign if the transaction necessitates it. That’s it — you’ve just completed an EMV payment!
America lags behind… again
In the same way we refuse to adopt the metric system, the US has ignored the clear benefits of switching over to an EMV system–until now. With the help of a few big banks and smaller credit unions, Visa and MasterCard are working to push EMV cards into the hands of Americans by April 2013. Options are still severely limited, but they’re growing, and the trend seems promising.
To get an idea of just how crucial EMV credit cards are to international travelers, take a look at this chart of EMV technology by region. The technology is most prevalent in western Europe, which includes popular destinations like like England, France, Italy, Spain and Germany.
|Region||# of EMV Cards||% of Cards w/ EMV||# of EMV Terminals||% of Terminals w/ EMV|
|Western Europe & Greenland||760 million||84.4%||11.9 million||94.4%|
|Eastern Europe, Central Asia & Russia||37.1 million||14.5%||611 thousand||68.1%|
|Canada, Latin American & the Carribbean||319 million||41.1%||4.4 million||76.7%|
|Africa & the Middle East||31.6 million||20.6%||462 thousand||75.9%|
|Asia Pacific||336 million||28.2%||4.6 million||51.45|
|Total||1.5 billion||44.7%||22 million||68.1%|
Source: EMVCo, reporting on Q4 of 2011.
Available EMV credit cards
If you’ve decided apply for an EMV card, we can help get you started with a couple of our favorites. For a full list of cards, check out our post on the best EMV credit cards.
Chase offers the first ever American hotel-branded EMV card: the Hyatt credit card. The signing bonus is 2 free stays at Hyatt locations worldwide after your first purchase. From there, rewards build at 3% back on Hyatt purchases and 1% everywhere else. Earnings are unlimited, blackout dates are nonexistent and there is no foreign transaction fee. On the annual anniversary of your signing, you receive a free night at a category 1-4 hotel. Being a cardholder automatically upgrades you to Platinum membership in the Hyatt Gold Passport program. Benefits include perks like complimentary Internet access, 15% extra points on room stays and expedited check-in.
The U.S. Bank FlexPerks Travel Rewards is a great travel card option. After charging $500 in the first 3 months, you’ll receive 15,000 bonus points worth about $150 in airfare. The base rewards rate is the standard and always predictable 1% back, but you’ll earn double on groceries, gas or airline purchases (whichever category you spend the most on). Points can be redeemed for flights without blackout dates or redemption fees. The annual fee is $49, but it’s waived the first year and the rewards easily cover the cost. Every year you charge $24,000, you receive 3,500 bonus points on top of your earnings. And–this is really cool–each reward ticket comes with a $25 credit to put toward ancillary charges like baggage fees and in-flight fees.