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John Cletheroe's
USA and Canada Holiday Hints |
It is very difficult to obtain a clear statement of the charges involved for visitors from Britain who use their credit or debit cards for purchases or to obtain cash while visiting the USA or Canada. This page contains the best information I have obtained so far. Details of charges and commission rates are from a leaflet published by the Cooperative Bank in the UK in May-98 relating to the use of their Visa Gold Card - rates for other cards are likely to be similar but may not be identical.
You can use both credit and debit cards (also sometimes called payment cards, cash cards or ATM cards) issued in the UK to make purchases in the USA and Canada, at the same range of establishments and for the same range of goods and services as in the UK. For example, department stores, petrol stations, motels and non-fast-food restaurants will nearly always take cards, but fast food restaurants tend not to. With a credit card you do of course take a chance as to what will happen with the exchange rate between the purchase date and the payment date, while on the other hand you don't have to pay for a month or so.
However, according to the Cooperative Bank leaflet mentioned above: "The amount of any transaction in a currency other than sterling will be converted into sterling at the rate set by us and we will apply a commission charge of 2.75%. The rate used may not be the same as when the transaction was made as rates may vary." (My emphasis)
It's a good idea to take a debit or credit card and know your PIN number so that you can use an ATM (automatic teller machine - i.e. a cash dispenser) to obtain cash in an emergency, although the commission charges for visitors from the UK obtaining cash from ATM's in the USA and Canada are high. According to the Cooperative Bank leaflet, there is a 2% charge for using their Visa Gold Card to obtain cash anywhere in the world, plus an additional 2.75% charge for obtaining foreign currency.
According to an article in USA Today during December 2003, Wal-Mart are now encouraging the use of PIN numbers instead of signatures when customers pay by means of debit and credit cards. In the future they will not accept MasterCard debit cards authorised by means of signatures. The use of PIN numbers instead of signatures is now widespread on the European mainland and is due to be introduced into Britain in the next few years, so it would seem very wise to know your PIN numbers if you plan to use cards for purchases in the USA or Canada.
I believe that if you use a credit card to obtain cash, either in your own country or abroad, then the full rate of interest applicable to credit cards loans is payable starting from the date of the transaction.
Using a debit card to obtain cash from an ATM is considerably less expensive than a credit card since (as far as I can discover) it only attracts the foreign currency exchange commission charge of 2.75%.
If you intend to use a card of either type to obtain cash then check which ATM network your card can be used on, for example the Plus system. I believe that the commission charge might possibly vary depending on which system you use although there is no mention of this in the Cooperative Bank leaflet. Perhaps there is only a difference when using a debit card.
ATM's are very widely available in the USA, slightly less so in Canada.
People in the USA and Canada advising visitors from abroad to use their credit cards in ATM's to obtain cash instead of using traveller's cheques are usually unaware of the very high rate of commission charge and interest rate that using cards attracts. Perhaps these high commission charges and interest rates only apply for holders of UK cards, not US or Canadian cards.
To state the obvious: be sure to have a sufficient balance in the appropriate accounts to cover any card payments while you are away. Tesco and Sainsbury's banks in the UK offer current accounts which pay you high rates of interests so these may be an attractive option if you plan to use a debit card while on holiday. Be sure to pay off the full credit card payment each month in order to avoid the horrendously high interest charges.
A credit card is by far the most convenient method of payment for car rental, whether that be the entire rental cost or just those elements not covered by a pre-paid voucher. The credit card must be the same name as that of the main driver; see this page for details and some possible solutions if this is not the case.
Holders of some US and Canadian credit cards qualify for free CDW/LDW when purchasing car rental in the USA or Canada with their card. No such arrangement applies for holders of any UK credit cards, unfortunately.
Finally, it is perhaps worth mentioning that the word "Visa" can refer to either a brand of credit card or the endorsement to a passport allowing the holder to enter another country - see Immigration.
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Most recently modified 5-Dec-03