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Debating between a low interest rate or lots of reward points? How to pick the best credit card for you.

Traveling Abroad? Consider a Chip-and-PIN Credit Card

Foreign countries have different cultures, different customs, different languages - and, to top it all off, some countries have different styles of credit cards.

Rather than using the familiar cards, which feature a magnetic strip at the top of the card, several countries have transitioned to “chip-and-PIN” credit cards, better for consumer safety. While some foreign vendors will continue to accept your traditional magnetic strip cards, some may not.

So, what’s the difference?

Chip-and-PIN cards are embedded with a computer chip that contains the information that would normally be contained in the strip along the top of the card. In addition to this chip system, users are required to enter in a PIN code, much like as would be required for a debit card.

The cards offer greater consumer protection, as it is harder to clone the payment information when a chip is being used, thus reducing identity theft. In France, chip-and-PIN cards have been responsible for a 50 percent reduction in payment fraud, according to the Federal Trade Commission.

The cards are increasingly being made available for U.S. residents, and before traveling, officials suggest you check with your credit card company to see whether chip-and-PIN cards are available. If not, they suggest that you carry a little extra cash, in case foreign vendors refuse to accept your current credit card.

Learn more about using chip-and-PIN cards on European travel.

Minimum Payments on Credit Cards

Video description

What happens when someone makes just the minimum payment on a credit card balance.

Video transcript

Voice over: On the hottest day of the year, Marta’s air conditioner broke. Marta decided it was an emergency. So she went to the store to buy a new air conditioner. Marta didn’t have enough cash, so she used her credit card. The air conditioner cost $300. That evening, her family was cool and happy.

The next month, Marta got her credit card bill for the $300 air conditioner. Marta had it in her budget to pay $15 each month until she finished paying for the air conditioner. $15 was her minimum payment.

Then, every month, Marta sent the minimum payment. But Marta’s balance didn’t go down $15 each month. The credit card company added interest to her balance every month. The annual interest rate on Marta’s credit card was 23 percent. So the credit card company added interest to Marta’s balance every month.

It took Marta more than 2 years to pay for the air conditioner, because she paid only the minimum payment. At the end of 2 years, Marta had paid $382: $300 for the air conditioner and $82 in interest.

Video from the Federal Trade Commission

A Consumer Financial Protection Bureau probe into Capital One credit card marketing practices resulted in $140 million in consumer refunds. If you’re eligible, the money will automatically be distributed to you. Learn more.

If you’re only making minimum payments on a credit card, find out how long it will take and what it will cost to pay it off.