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Most international travelers learn that overseas merchants prefer accepting credit cards with an EMV chip over those with a magnetic strip. But that doesn’t necessarily mean you should apply for a chip-enabled card before you travel abroad.
EMV cards will make some transactions more convenient
Although most other countries have moved away from magnetic strip cards, it’s still possible to use this old-fashioned technology overseas. Shopkeepers and restaurateurs might grumble a bit, but most are equipped to accept cards without an EMV chip if you ask.
However, traveling without a chip-enabled card is likely to be inconvenient at some self-service payment kiosks in Europe. These are commonly found at train stations, where customers can use a machine to purchase tickets. Many don’t accept magnetic strip cards, so you might be forced to seek out a station employee to process your transaction. This is something of a hassle, and could cost you valuable time if you’re on a tight schedule.
No foreign transaction fees should be priority one
Many American credit card issuers are starting to produce credit cards with EMV chip capability; you might even have one in your wallet right now. Consequently, there’s a different attribute you should be looking for in a card to use overseas: foreign transaction fees.
It’s common for credit card issuers to charge a fee (usually 3% of the transaction cost) on purchases made abroad. That might not sound like much, but it could tack a serious chunk of change onto your vacation. For example, if you spend $5,000 during a month-long backpacking trip to Europe, with a card that charges a 3% foreign transaction fee, you’ll end up having to shell out an additional $150 in fees.
Looking for a card that charges no foreign transaction fees before you board the plane is a smart idea.
The Nerds’ favorite cards for overseas travel
Here are a few good credit cards that come chip-enabled and charge no foreign transaction fees:
Barclaycard Arrival Plus® World Elite Mastercard®
With the Barclaycard Arrival Plus® World Elite Mastercard®, you’ll earn 2 miles on every dollar you spend. Each mile is worth one cent when redeeming for travel. And since you earn 5% of your miles back every time you redeem, that makes the card’s effective rate 2.1%.
Cashing in rewards is easy with the Barclaycard Arrival Plus® World Elite Mastercard®. You’ll simply book your trip however you normally would with the card, then go online and redeem your miles against the purchase in the form of a statement credit.
To get you to your next vacation faster, the Barclaycard Arrival Plus® World Elite Mastercard® comes with a signup bonus: Enjoy 40,000 bonus miles after you spend $3,000 on purchases in the first 90 days — that's enough to redeem for a $400 travel statement credit toward an eligible travel purchase. Its annual fee is $0 for the first year, then $89.
Chase Sapphire Preferred® Card
The Chase Sapphire Preferred® Card is one of the most popular travel credit cards out there, and it’s easy to see why. You’ll earn 2 points for every dollar spent on travel and dining in restaurants and 1 point per dollar spent on all other purchases.
Usually, points earned with the Chase Sapphire Preferred® Card are worth 1 cent each. But if you redeem them for travel through Chase’s online booking tool, their value goes up by 25%. You’ll also have the option to transfer your points to participating frequent traveler programs at a 1:1 ratio, which provides a lot of flexibility.
The signup bonus is great: Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $625 toward travel when you redeem through Chase Ultimate Rewards®. It charges an $0 for the first year, then $95.
Capital One® Venture® Rewards Credit Card
The Capital One® Venture® Rewards Credit Card is a good choice if you’re interested in minimizing annual fees. As with the Barclaycard Arrival Plus® World Elite Mastercard®, you’ll earn 2 miles for every dollar you spend. Each mile is worth $.01, and rewards can be redeemed for nearly any travel purchase in the form of a statement credit.
The Capital One® Venture® Rewards Credit Card’s signup bonus is impressive: Enjoy a one-time bonus of 40,000 miles once you spend $3,000 on purchases within 3 months from account opening, equal to $400 in travel. Its annual fee is lower than our two other picks at $0 for the first year, then $59.
Enjoy your chip trip!
Image via iStock.