Continuing the Conversation: Using Credit, Debit, and ATM Cards in Europe

At our meeting last night, many travelers expressed confusion about what type of card to use when making purchases in Europe. Admittedly, I'm hardly an expert on this topic myself. This is probably for two reasons:

1. In the past, I've always used cards issued through my credit union. After doing some reading on the subject from some websites I'll share with you, it turns out this is usually a good idea, since credit unions tend to charge lower fees. So, the fees I have been charged in the past for purchases abroad have been quite negligable, in my opinion, but I'll be checking before I leave to see if they've changed.
2. I'm not really a big shopper. I just don't buy that much stuff, so I tend to incur fewer transaction fees anyway.

My strategy for spending abroad has been to withdraw my spending money in cash from an ATM using my debit card. You pay transaction fees for this, but if you withdraw larger amounts at a time you avoid multiple fees. I've only used my credit card for larger purchases.

For those wondering what your options are and what fees you should inquire about, here are some guides you might find helpful:

• The Sleaze of Credit Card Fees - another handy guide from Rick Steves
• Easy Money: Credit Cards, Debit Cards and Cash in Europe - written for trasitionsabroad.com, this quick guide explains the pluses and minuses of different methods of payment. Good advice for those not sure which card(s) to bring.
• European Travel Tips - from VISA. One issue that US credit card holders seem to be running into is that many European countries have adopted a "chip" and "pin" system that allows customers to use a 4-digit pin number instead of signing for purchases. This makes some merchants confused when you attempt to pay with a card that has no PIN but requires a signature. In this guide, VISA tells us to be assertive and insist that the card be swiped anyway, since it should work, though perhaps not in automated kiosks.

I hope you find the above information useful. As always, your bank or the credit card company is the best source of information on the rates for your particular card. My advice, after reading up on the subject and discussing the issue with all of you last night:

• Inquire about special fees for international purchases BEFORE traveling. As one of our fellow travelers related to me in an email today, different companies (and banks) charge different rates, so shop around for the best deal. If the fees charged by your credit card company are exorbinant and you can't justify the hassle of applying for another card for a short trip, limit your use (or don't use it at all) by relying on cash withdrawals from debit or ATM accounts.
• Although it's no fun paying fees to credit card companies (especially ones that seem to be charged for no good reason), fees at exchange bureaus that convert currency are considerably higher, so bringing all of your spending money in cash for exchange is not a good alternative.
• Also, as we discussed, cash is irretrievable if stolen, whereas you can cancel a lost or stolen card.
• Use debit and/or ATM cards to withdraw cash, not credit cards. Many credit card companies allow cash advances at ATM's, but they will often begin charging you interest immediately.
• Given the transaction fees charged by ATM's, withdraw cash in larger amounts (I would recommend to plan for only 2-3 trips to the ATM; once to withdraw pounds sterling in London, another France to withdraw Euro, and only again if you absolutely need it). Then keep the cash securely stored in a pouch or pocket under your clothing to keep it safe from pickpockets.
• When using your debit card, keep your PIN number secure. Do not accept help from "friendly" strangers, and hide the key pad when you type in your number. DON'T write your PIN number on the back of your card.
• Carry numbers of emergency services for your cards so you can report a theft if it occurs. Create some coded system to record your card numbers (writing it backwards, adding 3 to every digit, etc.)
• It is useful to bring SOME cash in case your card doesn't work for whatever reason. While the situation is being remedied, at least you'll still be able to eat.
• Of course, alert your bank/credit card company of your travel plans so that your card is not blocked due to fraud protection systems.