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Going on vacation? Pack the right credit card

NEW YORK — The international language of plastic is dying.

When traveling abroad, it turns out that the credit and debit cards that Americans use don’t always translate at the register. The problem is that banks in many parts of the world have been migrating to a different type of card over the past 15 years or so. These cards are read by a chip, rather than the magnetic strip on U.S. cards.

There are a few measures travelers can take to prevent headaches.

Chase, for example, this week will become the first major U.S. bank to make a card with the chip technology widely available. But the card, along with other options, comes with costs that need to be considered.

Here’s what globe-trotters need to watch:

Card confusion

It may turn out that you use your plastic without incident if you’re headed to well-traveled areas. But the problem can arise if a cashier isn’t used to processing U.S. cards.

In the United States, customers swipe the magnetic strips on their cards through a slot before signing for their purchase. Overseas, however, cards are read by a chip on the front of the card. These cards are inserted into a slot before users punch in a PIN to finalize the transaction.

The equipment that reads these chip-embedded cards also has a slot on the side where cashiers can swipe cards with magnetic strips.

“But if you’re outside the major hubs, they may not be familiar with how to process it,” said Randy Vanderhoof, executive director of the Smart Card Alliance, a trade group of card developers and issuers.

But even if a cashier knows what to do, there’s another snafu you could encounter. The transaction may simply be declined.

This can happen if your bank suspects the transaction is fraudulent, which may be the case if you don’t travel often and are suddenly ringing up purchases around the world. The best strategy in this scenario is to try paying with another card if you have one. You may also want to call your bank before your trip to give them a heads up.

Options

If you want to minimize the potential for hassles, there are a few ways to get a chip-embedded card.

The newest option comes from Chase. The bank on Friday plans to announce its new J.P. Morgan Select card, which is designed for those who travel overseas regularly. Chase says it will be the first national launch of a credit card with chip technology by a major U.S. bank.

The card has a $95 annual fee, so you’ll need to consider whether the benefits are worth it. In addition to other travel perks such as roadside assistance and emergency medical coverage, cardholders earn 2 points for every $1 spent on travel and 1 point for every $1 on all other spending.

The card also doesn’t charge a fee for every transaction that takes place abroad, which is common for most credit cards.

It’s worth keeping an eye out for other chip-embedded cards. This month, U.S. Bank is giving 20,000 of its travel rewards customers a new card with the chip technology. The bank says it plans to expand the offering in the coming year.

Wells Fargo also plans to start testing the chip technology this summer with 15,000 customers. The company wouldn’t say if and when its cards would become widely available. The new cards also have magnetic strips.

If you don’t travel overseas enough to bother applying for a new card, another option is the Cash Passport from MasterCard. This is a prepaid card available in British pounds or euros and can be purchased online or at Travelex stores (to find a location, go to www.us.travelex.com).

Foreign fees

Ultimately you may decide to exchange some local currency for those situations when your card may not work.

Keep in mind that the vast majority of credit and debit cards charge a foreign transaction fee. The fee is usually 3 percent of the purchase amount, according to CardHub.com, a consumer comparison site.

So for a $150 dinner, you’d be charged $4.50. That doesn’t sound like much, but over the course of a week in Europe, fees could add up and annoy you if you’re not anticipating the charges.

Keep in mind that the vast majority of credit and debit cards charge a foreign transaction fee. The fee is usually 3 percent of the purchase amount, according to CardHub.com, a consumer comparison site.