Representative example: When you spend £1,200 at a purchase rate of 21.9% (variable) p.a. with a fee of £3 per month, your representative rate is 27.7% APR (variable).
Home to the Statue of Liberty and Hollywood Boulevard, the USA attracts over 2 million visitors from the UK each year. As the USA is such a popular destination among Brits, it’s worth knowing how to use your British credit card across the pond.
Visa, Mastercard and American Express credit cards are all widely accepted in the USA, though you should be aware that payment methods differ slightly from those in the UK. The insert-and-sign method is the most common form of payment when making purchases in the USA, rather than the chip-and-PIN method that many Brits are now used to.
ATMs are easy to find in the USA – located on streets, and at supermarkets, petrol stations and even bars and restaurants.
However, ATMs usually charge you a fee simply for using the ATM, and the fees are typically around $2-$3 (about £1.60-£2.40) per transaction, though this may change depending on location. Here is an ATM locator of all MoneyPass ATMs, which do not require you to pay a surcharge. Another way to avoid surcharge fees is to simply ask for cashback when shopping at supermarkets and stores, but make sure you present a form of ID when doing this, such as your passport.
If your card doesn’t have a magnetic stripe on the back, you may find that your card doesn’t work in some ATMs, since many are not chip-and-PIN enabled. However, the magnetic strip is slowly being phased out, so newer ATMs are more likely to have a chip reader.
It’s worth bearing in mind that when using ATMs, you are also likely to be charged a foreign currency exchange fee per ATM transaction, and if you withdraw cash as an advance from your credit card, you’ll pay interest.
It is perfectly acceptable to use your card for most small transactions, except for paying at either small bars or food trucks. It may be handy to take some dollars with you if you plan on tipping servers at restaurants and bars, especially as the USA has a culture of tipping.
Find a great deal on your travel money for the USA
While the USA has started to roll out a chip-and-PIN system across the country, it is not yet used by all stores. Most commonly, the insert-and-sign method is used, so you should be prepared to insert your card and then sign the printed slip given to you by the store. If the shop does not accept chip cards, and your card has a magnetic strip, then you can use the swipe-and-sign method instead.
However, as of April 2018, several card networks, including Mastercard and Visa, decided to remove the requirement for signatures on purchases. This means in some places you may be able to simply swipe or insert your card to complete a transaction, with no requirement for a signature.
Signing typically depends on the transaction total, as purchases amounting to less than $50 (around £40) typically do not require your signature, although this may vary depending on the shop.
It’s also worth noting that contactless payments aren’t yet accepted in the USA.
By exercising some caution when using your credit card in the USA, you’ll have a relatively trouble-free experience.
Remain alert to street crime, especially where two or more people work in distracting victims before decamping with their valuables. There also have been numerous instances of identity theft, so make sure you know where your card and forms of identification are at all times.
Credit card fees can leave a noticeable dent in your pocket when you’re travelling overseas, so know what you’re up against well in advance and choose a card with no or low fees.
British credit card issuers typically charge a fee equivalent to 1% to 3% of your transaction, so check your card’s terms to avoid statement surprises. Some cards designed for travel come with no foreign transaction fees, so if you’re planning a trip, this could be a good time to switch.
Learn more about cards designed for overseas spending
If a shop offers to bill your credit card in sterling, dynamic currency conversion comes into play. While this might sound like a good deal, you’ll actually end up getting a worse exchange rate, and you might also end up paying currency conversion fees. Whenever you’re presented with an option, choose to pay in dollars.
Using your credit card to withdraw money from an ATM may not make sense unless it’s a bona fide emergency. Each time you withdraw funds from an ATM, you’re likely to pay a cash advance fee. Your APR for cash advances is typically higher than your purchase APR, and you’ll typically get no grace period on interest — instead, you start paying interest immediately. Again, some cards designed for overseas spending will waive this fee.
The table below serves as an example of how much extra you may pay to use your credit card in the USA.
Additionally you can get an idea of costs by using these online currency conversion tools from Mastercard and Visa.
A cash advance fee is calculated (and charged) when you withdraw cash from your credit card. It’s usually the greater of a flat fee or a percentage of the transaction. For example, “2.5% of the transaction, minimum £3.00”.
Ask yourself these simple questions before you leave so your spending in the USA does not hit any roadblocks.
When you’re in the USA, you don’t have to worry about where and when you can use your credit card. Just keep some cash handy to pay for small purchases or for tipping.
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