NEW YORK (MainStreet) Many Americans believe incorrectly that paying abroad will be problem-free if they replace their traditional magnetic stripe credit card with a chip-enabled credit card.
It's a common credit card misconception that many international travelers are not aware of, said Matt Schulz, senior industry analyst at CreditCards.com, an Austin, Texas credit card comparison website.
Most of the chip-enabled credit cards offered by U.S. financial institutions are chip-and-signature cards, not the more advanced chip and PIN cards.
"Most people think if they have a card that has a chip with it, they will be golden when they go to Europe," he said. "That's not the full story."
Consumers who lack a PIN number will probably have trouble using their credit card even if it is a chip-and-signature card at places like unmanned train ticket machines and toll booths especially in Europe, he said.
"In your touristy spots, consumers will be fine using swipe technology, especially in larger cities," Schulz said. "The issue comes when you get off the beaten path and need a chip-and-PIN card."
The good news for travelers is that more chip and PIN cards are being made available by major financial institutions and credit unions such as Barclays, USAA and Wings Financial Credit Union, he said:
"If you are a member of a credit union or a smaller bank and you're in the market for a chip-and- PIN card, it would be worth calling and asking whether they offer one," Schulz said. "You never know what you might find."
Since the chip-and-PIN cards contain computer chips, the technology can authenticate the transactions and protect consumers from data breaches and other types of fraud.