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Using a credit card in China
Outside of major cities like Beijing, Shanghai and Chengdu, China is still largely a cash-based economy.
The Chinese are typically averse to debt so don’t be surprised if you find an overall air of negativity surrounding the use of credit cards. If you’re limiting your visit to larger cities such as Shanghai, Beijing, Guangzhou, Tianjin or Chengdu, you’ll find no significant problems using a credit card in China. However, outside of big cities, you might have trouble finding ATMs and businesses that accept credit cards.
Compare credit cards for use in China
What credit cards can I use in China?
Visa, Mastercard and American Express find acceptance in China, although to varying degrees. You may be able to use your credit card at mid-sized to large hotels, restaurants and other businesses in most major cities, but you’ll find very few or no takers in rural areas or at small family-owned restaurants and shops.
PINs in China
Chinese cards come with six-digit PINs. ATMs of some banks accept four-digit PINs, and in some cases you can override the system by keying in two zeros before your PIN. However, this does not work at all ATMs, so it’s best that you check with your bank before you depart. You may be able to easily change your Canadian credit card to a six-digit PIN before you go. Don’t forget that three incorrect attempts at entering your PIN will lead to a temporarily blocked card.
Potential credit card fees in China
You should always keep an eye on credit card fees, especially when you’re travelling overseas.
- Foreign transaction fees. Most credit cards issued by Canadian banks come with foreign transaction fees. Sitting around 2.5% of the total transaction cost, you’ll need to pay this fee every time you use your credit card outside of Canada. Fortunately, there are a few credit cards that offer no foreign transaction fees in Canada.
- Currency conversion fees. If someone gives you the choice of paying in Canadian dollars or Chinese Renminbi with your credit card, always choose the local currency. Paying in Canadian dollars with your card will subject you to a dynamic currency conversion that can lead to poor exchange rates and currency conversion fees. Always choose to pay in the local currency and let your bank do the currency conversion.
- Cash advance fees. If you use your credit card to withdraw money from an ATM, you’ll face a cash advance fee as well as the cash advance interest rate, which is usually charged from the day you withdraw the funds. To avoid the high APR, use your debit card to withdraw funds from an ATM.
- ATM fees. Even using your debit card to withdraw funds from an ATM will likely have you facing an ATM fee. To avoid this fee, you can use a debit card issued by a bank that has an international ATM alliance, such as the Global ATM Alliance that Scotiabank is a member of.
- Surcharges. Although surcharges aren’t legal in Canada, businesses in China commonly add a surcharge to the total cost of the purchase when a customer pays with a credit card. In some instances, this cost is a result of fees imposed by processing banks. If you’re not sure, ask about the surcharge before handing over your card.
Can I avoid all of these fees?
Yes, here’s how:
- Avoid foreign transaction fees by applying for a credit card that waives this fee.
- Avoid conversion fees by always paying in the local currency.
- Avoid the high cash advance APR by using your debit card (instead of your credit card) to withdraw cash from an ATM.
- To skirt around ATM fees, you’ll need to use a debit card from a bank that belongs to an international ATM alliance – plus you’ll need to stick to ATMs that belong to that network.
- Surcharges may be more difficult to avoid. Before paying, ask the merchant if they charge a surcharge. If they do, you’ll have to pay with debit or cash – or avoid the transaction altogether. Some merchants may apply the surcharge to debit payments too, so be careful.
ATMs in China
ATMs can be difficult to find in small villages and rural areas. In big cities, you can usually find ATMs inside banks, malls and on the street. Your debit or credit card may not work at all ATMs in China, so you may have to use a few to find a brand of ATM that works for your card.
Should I use my credit card to get cash?
No, avoid using your credit card to get cash from an ATM at all costs. You’ll end up paying a cash advance fee as well as interest, which will start adding up from the day of the transaction. If you need to withdraw cash from an ATM, use your debit card.
Have more than one travel money option
Depending on where you’re going, using your credit card can present challenges. While this can happen in smaller towns and rural areas, the part of a city you’re travelling in can also have an effect. Even if you see a sign that says a business accepts cards, it’s best to confirm in advance of attempting to pay. The sign may be old, the network might be down or the business might not accept credit cards at all.
Cash is king in China, so it’s not uncommon for locals to carry up to 2,000 RMB in cash at all times. You might want to keep at least 500 RMB with you, unless you plan to make a purchase that costs more. (See RMB to CAD conversions below.)
Is it safe to use my credit card in China?
Using your credit card in China is safe, although you’ll need to exercise at least the same levels of caution you would back home.
- Protect your PIN. Don’t write your PIN down anywhere. When entering your PIN, use the other hand to hide it from hidden cameras and snooping eyes.
- Select ATMs carefully. Use ATMs found in banks, shopping centres and otherwise busy areas. Avoid ones in isolated areas or unsafe districts.
- Keep an eye out for skimmers. If you feel that the card slot is not as smooth as it should be or if you think there’s a problem with the keypad, cancel your transaction. Someone might have installed a card skimmer on the machine.
- Keep your card physically safe. Instances of pickpocketing and theft are common in areas frequented by foreigners. Take extra care when venturing out after dark. There have been reports of thefts at airports and on public transportation as well, so remain vigilant at all times. Don’t leave your purse or wallet in a parked car. Instances of petty crime tend to increase leading up to the Chinese New Year.
How to prepare before travelling to China
- Carry at least two cards. Ideally, take at least two credit cards with you, with at least one being a Visa or Mastercard. That way, you can avoid being left without money if your primary credit card is lost or stolen.
- Think about foreign transaction fees. Paying foreign transaction fees does not make sense when you can find cards that come with no foreign transaction fees. For each transaction, you’ll save yourself 2.5%.
- Inform your bank. Banks monitor accounts to minimize fraudulent transactions. If your bank sees an unexpected purchase made in China, it will have a good reason to temporarily block your card. Let your bank know of your travel plans in advance.
- Carry emergency numbers. If your card ends up lost or stolen, you should know which number to call. Write down your credit card providers phone number and carry it on you at all times.
- Know how you’ll get cash. Since cash is king in China, you’ll need to carry some on you at all times. Find out which ATMs allow you to withdraw funds and use your debit card to avoid the cash advance interest rate.
You can avoid unexpected problems by asking yourself these simple questions before you leave for China:
- Which cards should I take? Carry at least one Mastercard or Visa card and have at least two credit cards with you.
- Did I inform my bank? Unless you want to deal with the possibility of a blocked card, inform your bank before you head overseas.
- Will I pay extra fees? Check if your current credit card charges foreign transaction fees. If it does, consider applying for a card that charges no foreign transaction fees.
- Where will I get money from? Avoid using your credit card at an ATM, instead withdraw using your debit. Remember that your card may not work at all brands of ATMs in China. You can also consider converting Canadian dollars to yuan (RMB).
China, despite its advances in technology, still remains a largely cash-based society, especially when you move out of the larger cities and towns. While you may be able to use your credit card in big cities easily, keep at least some cash on you at all times.
Using a credit card in …
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