Thursday, April 14, 2011

Another Reason Travelers Should Consider Switching To Credit Unions

Several months ago, I alerted you to the fact that currency exchange company Travelex would be offering the first "chip and pin"-style ATM card for travelers. Widely used in Europe, these types of cards offer added protections to their holders against theft; in order to use them, users must first type in a PIN number, meaning that a stolen card is useless. While most European stores and restaurants do still accept American-style credit cards, they don't work at many European vending machines (for tickets at rail stations, gas pumps, etc.). Because of this, American travelers can find themselves in sticky situations when they try to use their plastic abroad.

(Photo by William Grotonik)
Travelex offered a partial solution to the problem, in the form of a pre-paid debit card one could load up with cash before a trip. If Travelex had a better exchange rate, I could wholeheartedly endorse its new card.

Alas, it doesn't which is why I was so pleased to hear, via the New York Times, that two small credit unions--The State Employees Credit Union of North Carolina and the United Nations Federal Credit Union of New York--have started offering chip and pin cards. The first has implanted the technology into its debit cards and the second into its credit cards. When interviewed, an officer of the credit union in North Carolina stated they felt the move was important for their customers, particularly since they'd heard that Canada and Mexico would soon be moving to this new technology.

So why aren't the big banks offering these types of smarter cards to their clients? Its a question that the article tackles, and frankly, there doesn't seem to be any answer beyond inertia. Because fraud hasn't been as widespread in the United States; and because the banks have been concentrating on cards that can be simply waived in front of scanners (rather than swiped), nothing has been done to catch the US up to the rest of the world.

Several months ago, I heard a rumor that Mastercard would be introducing a chip-and-pin card. It was supposed to be on the market in December, but that deadline has obviously passed. Let's hope that rumor turns out to be true, and not much more time passes before we're able to easily access this new and better technology.

In the meantime, maybe we should all just switch to Credit Unions. Heck, their fees tend to be lower!

1 comment:

  1. My boyfriend and I were just talking about traveling to Jamaica for a friend's wedding in the fall when our conversation moved to how much we'd love to travel abroad and how would we spend money/keep funds safe. We live in North Carolina and are members of a credit union bank but haven't heard about this yet! Will be sure to check it out. Thanks for the 411!