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- iHaveNet.com: Travel
By Ed Perkins
Travelex, the leading foreign exchange agency, introduced the first chip-and-pin debit card available to U.S. travelers. "Chip and Pin Cash Passport" solves the problem many of you face using U.S.-style cards in Europe, but at a stiff price. Unless you put a lot of money on the card, the exchange rate is terrible.
You've probably seen reports from traveling Americans who find they can't always use their credit cards overseas. The problem is that U.S. banks still use the "stripe and sign" system that encodes account information into a machine-readable magnetic stripe on the back of the card, while European banks and merchants have largely switched to an incompatible "chip and pin" system that encodes account information into a memory chip embedded in the card.
Travelex is now issuing the first chip-and-pin card aimed at American travelers. It's a stored-value debit card, not a credit card; it carries the
All in all, the card seems great -- except for one big problem: the lousy exchange rate. When you store $500 worth of euros for the card, you pay 1.52 to the dollar, compared with a bank rate of 1.32. That's an exchange premium of more than 15 percent, which is far more than you pay with any credit card, most ATM withdrawals, and exchanging cash or travelers' checks at most locations. You have to store $2,500 or more before you get a decent exchange rate, currently 1.38 to the dollar, still worse than many other options. Pound rates are similar.
Clearly, Chip and Pin Cash Passport is a poor substitute for regular credit and debit cards with both a stripe and a chip. But until the U.S. banks issue such cards, it will have to do. If you're heading overseas:
-- Continue to use your regular stripe debit and credit cards wherever you can. Airlines, hotels, restaurants, and merchants can still process either system -- although some may need a bit of prodding. And most European ATMs still accept stripe debit cards to dispense cash.
-- If you think you'll need it, buy a Travelex card with a bit more value than you expect to charge, but use it only where you can't use your regular cards. That's mainly for automatic merchandising machines -- increasingly used to dispense rail and transit tickets, highway and bridge tolls, 24/7 gasoline dispensing machines (more prevalent in Europe than here), and other such devices.
You can currently buy Chip and Pin Cash Passport cards only at retail locations. Log onto www.travelex.com/us/locations for locations. Presumably, online sales will be available soon.
So far, at least in public, American Express,
For now, the Travelex card is better than nothing. But let's hope it prods the big banks into issuing their own dual-system cards -- with better exchange rates.
© Ed Perkins, TRIBUNE MEDIA SERVICES, INC.
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Travel | The New Travelex Chip Card -- OK, But Not Great