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PIN needed with chip - credit cards

Do U.S. banks consider Chip / PIN purchases to be cash transactions? I'm concerned that there maybe hefty service fees and interest, for small transactions such as tolls, and gas.

Cory

Posted by
8009 posts

No one knows the terms of what kind of card you have; the best practice to get the facts is to contact your own bank.
Or you could login into your account and it will have the terms and conditions spelled out somewhere.
My card is a chip and signature with no international fees and my purchases come up as credit and not cash advances.

Posted by
919 posts

Is it a credit card issued by a US Bank? It is going to be a chip & signature card. You are going to need to get with your issuing bank to see about any foreign transaction fees. All of our cards are not transaction fee cards.

Posted by
2577 posts

Somewhere you have received some awful information. By now, all newly issued US credit cards have chips.

If you're lucky, your bank will issue your chip & signature card with a functioning PIN. Without the PIN, you will not likely be purchasing gas at pay-at-the-pump locations. Whether you have a functioning PIN or not has absolutely nothing to do with fees and everything to do with your ability to make purchases at unmanned locations.

Any usage fees you may pay will originate from your card issuing bank and only they can give you accurate fee schedules.

Posted by
27 posts

My cards all have a chip. I asked my credit card companies, both said that if a pin is needed and used it will be considered as a cash advance, which would result in a transaction fee, and a very high interest rate. I am trying to find out if others have been charged with bank fees, after using their PIN for Gas, tolls, etc. Thank you
Cory

Posted by
2577 posts

if a pin is needed and used it will be considered as a cash advance, which would result in a transaction fee, and a very high interest rate.

Banks which do not issue credit cards with PIN functionality will be correct in stating that the only time their cards require PIN use will be at an ATM. This has not changed since the magnetic strip days.

Chipped cards were designed (in the 80s) to reduce fraud by requiring the card user to input his PIN for every purchase. There are no signatures. A stolen credit card is useless unless the thief also knows the PIN. Mandatory PIN usage resulted in a significant drop in fraud.

Some 30 to 35 years later, the USA banking system finally adopts chipped technology but modifies mandatory PIN usage. To use your card as widely in Europe as you do in the US, you will need a PIN, specifically at locations where there is no sales staff such as pay-at-the-pump gas stations or when purchasing train tickets from a kiosk. Very likely, your attempts to make purchases at these types of locations will be denied.

A number of US banks issue credit cards with a PIN which can be used for this very purpose - transactions at unmanned locations. Obviously, your bank does not. A few US banks issue true chip & PIN credit cards meaning that PIN entry is the default acceptance method for all purchases. Such cards should have a very wide acceptance in Europe and elsewhere.

In further reference to fees, many banks charge up to 3% for all transactions made outside of the USA, regardless of the currency of the transaction. Many banks charge nothing for foreign transactions. You might want to ask your bank about currency conversion fees and/or foreign transaction costs.

Posted by
2916 posts

I asked my credit card companies, both said that if a pin is needed and used it will be considered as a cash advance

I have seen that advice given before, and it's misleading at best. As far as I know, the only time a credit card transaction will be considered a cash advance is when it's used to get cash at an ATM.

Posted by
7574 posts

Use your chip credit card, and if the attendant/waiter/server/salesperson offers you the chance to enter a P.I.N., let them know you have an American card that involves signing -- wave your hand in a signing motion, if that will help convey the message. If offered the opportunity to have the transaction rung up in dollars, opt only for it to be done in Euros, so you aren't charged for that unnecessary, on-the-spot "service." Your card-issuing bank will convert your transaction to dollars anyway, which you'll see on the next month's statement. Your only fees should be whatever foreign charge transaction fee your bank charges, and your only interest cost would be if you don't pay off your card each month. Don't input any P.I.N. unless it's while withdrawing cash at an ATM, and then you should be using an ATM card, not a credit card. Get an ATM card before your trip, if you don't already have one, and understand their fees. As a reminder, alert your bank(s) prior to your trip, so they understand you will be making purchases/cash withdrawals in France, and won't think your card's being used abroad by a thief.

Posted by
2577 posts

My cards all have a chip.

All credit cards have a chip.

I asked my credit card companies, both said that if a pin is needed and used it will be considered as a cash advance, which would result in a transaction fee, and a very high interest rate.

What is the name of these card companies? Who specifically told you this?

Only a cash advance from an ATM is a cash advance. Very likely you are banking somewhere that will charge you a transaction fee, fees that you will pay every time you use your credit card outside of the USA. These fees have nothing to do with the chip on your card or your using or not using a PIN.

I am trying to find out if others have been charged with bank fees, after using their PIN for Gas, tolls, etc. Thank you

I have never been charged bank fees of any kind using my credit card outside of the USA. My chip & signature card was issued by PenFed. PenFed cards are issued with at functioning PINs, entry is required when making purchases at unmanned sales locations. PenFed is not the only bank/CU issuing PINs with chip & signature cards Not all banks provide their customers the flexibility that PIN use offers.

audreyspency - I am going to guess that your credit cards were issued by one of the large bail-out banks such as Citicorp, Chase, Bank of America, or Wells Fargo. Typically, credit cards issued by these banks are chip & signature with no functioning PIN. These banks also charge 3% on all foreign transactions.

Shopping around for a bank which gives you better terms on your credit cards could potentially save you money.

Posted by
1996 posts

Unless you have a Barclay card or BoA credit card, you probably don't have a Chip and Pin credit card. To me it sounds as if the PIN you are referring is for using at an ATM, which is different than what you want.

I used my Chip and Signature card from Chase all around Europe and never had a problem. But you need to check with your credit card provider to see what the fees are for each transaction.

Posted by
7659 posts

My cards all have a chip. I asked my credit card companies, both said that if a pin is needed and used it will be considered as a cash advance, which would result in a transaction fee, and a very high interest rate. I am trying to find out if others have been charged with bank fees, after using their PIN for Gas, tolls, etc. Thank you

The big problem is that when you call your credit card company, you get a low level call center employee that works off a FAQ list with scripted answers. Use of a PIN in the US is unheard of for Chip and Signature cards and I doubt that the person is even aware of Chip and PIN use in Europe. Of all the reports on this site, I do not recall anyone ever noting that they were charged for a cash advance on a merchandise transaction. Of course, if you were to use the PIN, you are essentially just fooling the system, since it is not verifying that the PIN is accurate, as some have said, just putting in 4 random numbers might work, just to move the transaction along...maybe so.

The network knows the type of purchase made, even down to whether it was a meal, merchandise, groceries, etc. One of my credit cards, in the fine print, even notes that if you use your CC to get Chips at a casino (as well as other transactions) it is a cash advance...regardless if a PIN is used.

Posted by
3521 posts

No, no no. A thousand times no!

Using your PIN to make a purchase outside the US will NEVER be a cash advance. The only time a transaction is a cash advance is when you, the card holder, receives cash as part of the transaction. So, using the card at an ATM to get cash? Yes, that is cash advance. Paying your train ticket at a kiosk where a PIN is requested to complete the transaction? NO, not a cash advance.

I have 4 different credit cards, Visa and MasterCard mix, each from different banks, and have used them probably 100 times in total in Europe. Several of those uses were at unmanned kiosks and they required a PIN. I entered my PIN and was never billed as a cash advance. It actually can't happen because a cash advance is a specific transaction that is not the same as a purchase.

The incorrect information being given is due to the fact that in the US the only time you will ever be asked for a PIN (unless your card is a true chip & PIN card without signature support) is for an ATM cash advance or a teller advance if you can find bank that will do that.

This is not to say you will not be charged fee by your bank for using the card. There are foreign exchange fees on many credit cards, they run 3% to 5% of the total purchase for each transaction. And some even have a per use fixed fee as well. This is not a cash advance fee. If your credit cards do charge foreign use fee, look around as there are many cards out there that don't charge any fees at all.

Posted by
2577 posts

The big problem is that when you call your credit card company, you get a low level call center employee that works off a FAQ list with scripted answers.

Paul points out the problem precisely.

Posted by
12172 posts

What Mark said. It's only treated as a cash advance when you get a cash advance on your card. Otherwise it's treated as a credit card purchase. Foreign transactions fees are worth looking at. There are lots of cards now that charge no foreign transaction fee. Everything in my wallet was chosen with an eye toward foreign transaction fees (travel is always part of my planning). If your card does, it's time to get a different card.

There are true chip and pin cards in the US but they're rare. More common are credit cards that allow you to set a pin but are really chip and signature cards. You can use those cards with the pin in ticket machines and toll booths (sometimes you need to try twice). They won't show as a cash advance on your bill. At unattended gas stations, I've only had luck using a true chip and pin card. You can use your chip and signature card at any attended gas station (they are always attended in rest stops on highways, sometimes at grocery stores or other gas stations). In a hotel, shop or restaurant, they won't ask for your pin. Instead they will print something for you to sign, just like here.

Posted by
27 posts

Thank you all so much for your help. I think that I will call the credit card companies, and ask t speak with someone higher up, hopefully a person who is more specialized in foreign transactions. Thanks again.
Cory

Posted by
23434 posts

Cory -- it unfortunate that Tocard hijacked your question and dominated the responses and somewhat diverted the discussion. Let us know if you get a satisfactory answer from your bank. But to keep it simple. If you have a US chip and signature (most common form), it will be treated as a chip and requiring a signature when used in Europe. With a live person it will not be a problem. It is very questionable if a chip and signature even with pin can always be used in self service machine such as toll and gas stations. So have had positive experiences and others have not. Obviously, if you use your credit card in an ATM, the cash dispensed is a cash advance against your account and will incur additional fees. You could only use a debit card to obtain cash from an ATM.