Tag Archives: chip cards

Three Financial Tips If You’re Traveling

A long weekend in Venice, Italy was a good reminder for me to share a few heads-up when you’re traveling out of the country.

-Make sure you pack at least two different credit cards, or a credit card and debit card. If one doesn’t work, you need a plan B. It happened to me when my MasterCard came up with the error message that some international connection couldn’t be made. In other words – the computers couldn’t talk to each other. If you’re traveling with your partner, a joint card isn’t the answer. If one of the cards is lost or stolen, it’ll cut the other one off, too. Better safe than sorry or your holiday won’t be very relaxing.

-If you’re traveling anywhere but the U.S. your credit card has to have the new chip technology. By now, probably every Canadian card has been replaced, but make sure. I needed to help three times in Venice when Americans couldn’t use their credit cards. It’s strange that the country who invented the credit card (and millions of people really wish it hadn’t been invented) still doesn’t have this chip technology. Without it – your card can’t be used in Europe and many other places.

-Get your money when you arrive. I watched someone at one of the big banks obtain $1,000 Euros. If he had done it in Europe, he’d have saved around $50. I walked up to the first ATM at the airport and got some money fee-free and at a much better exchange rate.

On a personal note, if you’re ever heading to Venice, my suggestion would be to get a hotel outside the city. I stayed at the Best Western Airvenice for $51 a night (www.hotelairportvenice.com). It’s a 4-star, but the ratings in Europe aren’t the same as North America.

The hotel was immaculate and looked like new. There wasn’t a single thing out of place or worn down. Staying in 50 or so hotels a year, it was the nicest one I’ve stayed at in years. The hotel staff all speaks English, and at this hotel, or many others in the area, you’re a 20-minute train ride from Venice. If you want to be five minutes away, there’s another Best Western in Mestre. I’m glad I did stay in the suburbs after watching tons of people arrive in Venice itself and hauling around a ton of luggage through cobble stone streets. Then hauling everything up and down stairs over a ton of bridges with maps that are semi-useless in how the city is laid out. Trust me on this one…

By the way, if five days in Italy sounds exotic or expensive, it was a Lufthansa $700 all included seat-sale in February. When great seat sales come along, get the ticket to…wherever… and then figure out what you’re going to do there and why you’re going! With flight, hotel, and meals, I got there and back for under $1,000!

High Tech Credit Cards Are On the Way

Finally, credit card issuers are coming out with technology that isn’t from the 1960s and hasn’t changed since the invention of the cards.

They’re changing from the current swipe card with a magnetic stripe to a pin number and chip-type card. For the transition it’ll still have that old magnetic stripe, but also an embedded microchip.

These new cards are already being issued. The Royal is putting them out and remember I told you about a super cool Capital One 6.9 fixed card? I got it with the microchip today. As merchants get new point-of-sale terminals you’ll insert it and use a PIN number just like your debit card. So no more slip to sign because your PIN number is your identification.

What it’ll do is to drastically reduce the $300 million in credit card fraud. Now most of the time when merchants haven’t taken the basic steps, they’re liable for the fraud charges. The rest of the time, the card issuers eat the loss. Until now, that loss hasn’t been as expensive as converting the cards.

No, they’re not doing the conversion because they have much interest in identity theft or helping you. On fraud, you’re also not liable for any of the phony charges. Never have been. They’re doing the conversion because it’s going to be cheaper for them to convert to the new cards instead of seeing the fraud amounts increasing each year.

It’s been in use in Europe for a very long time but the conversion and rollout in Canada will be slow. If you get the new cool card it’ll work exactly like your old one did until all merchants have the new point-of-sale machines where you insert the card, not swipe it. It’s just that this new card has a little chip in it.

This year, about 4.5 million of these will be in your hands. By October 2010 it’ll be fully implemented, because about 90% of all cards will have expired and replaced.

What this’ll also start is a huge wave of contact-less cards that are NFC enabled. For tech people, that’s Near Field Communication. Nokia will have it in their cell phones next year and by next summer, Rodgers will be doing their trial a trial. It’ll let you just wave it past a merchants’ scanner and pay for something. It’ll be exactly like the Esso and Shell payfast keyfobs but it’ll be your Visa or MasterCard.

In all this, you still have to remember why they’re doing it. It’s never to help you but to get you to use your card a whole lot more. And especially in the small-ticket purchases that add up to tens of billions of dollars that card issuers really want a huge piece of!

After all, we spend almost 20% more when we use a credit card instead of cash. Mark my words: Two or three years from now the percentage of small-ticket purchases on credit card will be way up. Card issuers will get richer and you’ll go further in debt so this is not a win-win arrangement, trust me.