Banking on the right card

Yesterdays Frugal Traveler column in the New York Times gave some advice on “Packing the Right Credit Card“. There is some good advice in the article, but since it is general information that covers the world as a whole I thought I would add information that will specifically apply to Britain.

“Discover, for example, charges no fees, but is not as widely accepted abroad as Visa, MasterCard and American Express.”

Discover card will be no use to you. It simply isn’t accepted anywhere in the U.K. So you’ll need to stick with one of the other three. American Express, while accepted in many places, is not as widely accepted as the other two, Visa and MasterCard. Ditto, Diners Club which is, in my experience, accepted in even less places than American Express. My Advice is to make sure you have a Visa or MasterCard.

“But as they do with credit cards, banks tack on foreign-exchange fees to A.T.M. withdrawals. My home bank, Bank of America, charges $5 plus 1 percent of the withdrawal, while Citibank charges 3 percent of the withdrawal plus $1.50 at non-Citibank A.T.M.s.

Both reduce the fees somewhat if you use their own machines, or those of their partners. Bank of America, for example, partners with Deutsche Bank in Germany and BNP Paribas in France, so withdrawals are fee-free there (but not, however, at Deutsche Bank branches outside Germany).”

Bank of America is an excellent choice of ATM card, in my opinion. The trick here is to use ATM machines at ‘Barclays Bank’. Since there is an agreement between the two. You can use your Bank of America ATM card at Barclays Bank ATMs with no fees. Barclays is one of the big UK banks and their ATMs are located in most towns and cities across the country, so it shouldn’t be hard to find one.

Last time I used my Bank of America ATM card in a Barclays Machine, not only were there no fees, but when i checked my statement, the exchange was better than I would have got hadIi bought Sterling Cash or Travelers checks before I left. Of course I can’t guarantee that for every transaction.

Something not mentioned in the article, but it is good to be aware of is ‘Chip and Pin’. Most UK issued cards now have small chips in them. Rather than use the magnetic strip on the back of the card, retailers have machines that read the chip. When this system was firs introduced it caused some problems for overseas travelers, including me. Retailers refused to accept the card because it didn’t have a chip.  In most places you should not have a problem, but the retailer can and must accept your card by swiping the magnetic stripe in the traditional way.

Finally a word about ATM/Debit cards and cash back. It’s unlikely you’ll be able to use your ATM card as an ATM card in a store. In most cases it will be a ‘credit’ transaction rather than a ‘debit’ transaction. this means that you’ll be unlikely to be able to get cash back. And remember, unlike most of continental Europe, Britain does not use the Euro. They still have the good old British Pound.

If you have experience of using Credit Cards and ATM machines in the UK please share it with us and add your comments below.