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TravelHaven Tips — Ugly American Credit Cards

Your U.S. credit card probably won’t be accepted these days by many merchants in Europe. Much of the European Union has converted to the chip-and-PIN system. Credit cards are embedded with a microchip and require a PIN (personal identification number) for transactions, similar to using your debit card for a point-of-sale purchase in the U.S.

The chip-and-PIN system is already in wide use in the British Isles, Scandinavia, France, Switzerland, Belgium and the Netherlands. The rest of Western Europe is making the switch this year. Even our close friend Canada will convert by 2015. So far, U.S. banks have not committed to any conversion. Automated machines in Europe may take your U.S. credit card if you know the PIN number. Make a point to ask your bank for the number before you depart.

If your U.S. card is rejected, there’s usually a solution. Cash still works and you can get it from any ATM, which has no problem accepting magnetic-strip debit cards. Of course, you can just stock up on foreign currency before you go.

Fortunately, automated payment machines at parking garages and tollbooths often have a cash option. At train stations, you can buy your ticket with euros, rather than charging it at a ticket machine. If the gas station has an attendant, he may be able to take swipe your credit card and have you sign the receipt – the old-fashioned American way.

At most hotels, restaurants and shops U.S. magnetic-strip cards can still be used in the new chip-and-PIN card processors, but that will likely change in the very near future. Then those venues will stop accepting the old-style cards.

There are other reasons that European merchants prefer cash. Some less-than-scrupulous owners prefer cash in order to under report income to reduce their tax payments. For others, the very high commissions charged by credit-card companies cut deep into the small profits of mom-and-pop businesses like boutique hotels and restaurants and souvenir shops. For these reasons, you might get a discount for paying with cash or be charged a fee for using your credit card. Some just don’t accept credit cards at all.

So it pays you to give up the plastic and change to an all-cash regimen when going to Europe.