To swipe or not to swipe ...

In an article on NYTimes.com’s travel section, Susan Stellin discusses how to use credit cards while traveling abroad. Stellin discusses avoiding a freeze on your account, rejection of cards abroad and the growing trend of chip and PIN cards abroad, as opposed to our American magnetic strip cards.

Stellin mentions how most travelers know to call their financial institutions to let the banks know of any upcoming travel plans so that they don’t freeze an account. I would say to also let your bank know EXACTLY what day you will be leaving any particular city or country. A friend of a friend recently had a problem where her account was emptied in Italy, several days after she had left the country. She now is having issues working out the situation with her bank. I also would say to warn your bank about a cap on spending or withdrawals so that if your information is stolen while you are abroad, your bank still will know to freeze your account and not assume it was you who made a $1,000 withdrawal in a rural village of Italy.

Another growing problem abroad, according to Stellin, is the increased use of a different kind of card in other countries that incorporates a chip and requires cardholders to enter a PIN number; unlike our cards, which have the magnetic stripe that you have to swipe. The credit card companies that Stellin spoke to said that travelers should insist that they still can use their magnetic cards, but trust me, it’s very difficult to argue with a store employee, even in England where they speak the same language.

The chip cards were just starting to come into play when I was in London, but my problem was with the store clerks’ demand that your signature EXACTLY match the one on your card. Now, we all know that those little strips they leave on the back of the cards for your signature are practically impossible to write on. And, obviously, your signature does not look exactly the same every time you sign something. Frankly, I think they should be more worried if it DID look exactly the same. That would be a much more sure sign of forgery or fraud. Anyway, it took about 10 minutes of convincing the Sainsbury’s employee, and two more forms of ID, that it was indeed my signature and I was indeed the cardholder.

Most credit card companies also charge exorbitant out-of-country swipe fees, so make sure whatever you’re buying is worth it. Honestly, credit cards should be a last resort while traveling abroad. Cash is the best option and often presents fewer complications. But be careful with cash, as well. Keep smaller amounts in many different pockets or carry a money belt that lies flat against your body and is invisible to passers-by. Also, don’t go fishing around your money belt in public.

I would suggest exchanging at least a few hundred dollars for local currency before you leave because exchange rates at airports are horrible, and if you need to grab a cab or a buy a ticket for local transport, you’ll need the local currency on hand. And find out if your bank has an international counterpart that you can withdraw money from without being charged a fee. For example, when I went to London, I found out from Bank of America beforehand that they had an agreement with Barclay’s — one of London’s biggest banks — where we could withdraw money charge-free. Also, don’t assume that just because you have a Citibank account and there’s a Citibank in St. Petersburg, Russia, that it won’t charge you a fee. Make sure of everything beforehand.

In the end, budget yourself, be smart, do your research and use credit cards as a last resort.

Have I missed anything? What have your experiences been with using credit/bank cards abroad?