Figuring Out Money in France

One of the first things you will have to face when traveling is how to buy things. This really shouldn’t be as hard as it is, so I’ll try my best to clear it up.

Using Cash

The easiest way to get around when you’re traveling is by just having cash on hand. We had no trouble withdrawing cash from ATMs when we visited a few summers ago, using our US debit cards. We also would make sure to ask for change since the train station kiosks don’t accept paper money, only cards and coins. If you don’t have coins, talk to the agent (and the lines are long with other tourists who didn’t know better).

That was manageable for a few short weeks but I’ll be damned if I have to manage cash and coins while living there for 11 months. I always lean towards solutions that offer efficiency and less headache but I realize that this (sometimes) means it isn’t frugally-minded, shall we say. If you’re looking to save money, cash is probably easiest if you don’t have ATM fees (if you bank with USAA, for example).

Using Plastic (Credit Cards)

Just like the US, you can operate cash-only but the convenience of cards can’t be beat (I don’t carry cash usually). And for spending 11 months in France, part of the experience is “doing as the locals do” and the locals use cards.

The Credit Card Landscape

Here’s the important thing you need to know: cards in Europe are “Chip + PIN” cards aka Europay/MasterCard/Visa (EMV) cards. It’s been this way in France since 1992. That means there’s an entire generation of young people who haven’t seen or dealt with swipe cards. Poor Americans :-(

This means that while you could use your “normal” US magnetic swipe-based card, you’ll run into situations where either they won’t work (kiosks) or it’s a pain and you’ll be slapped with foreign transaction fees (FTF). We did this a few times while we were there and it worked alright but often we’d prefer to use cash and avoid the inconvenience.

OK, so then what? Well, you could obtain a Chip + PIN card in the US and bring it over, it’s 2014 after all, aren’t we there yet? This is surprisingly difficult, as it turns out.

Chip + Signature, whaaaat?

You see, there are actually two types of chip cards, Chip + PIN and Chip + Signature. You are forgiven if this never occurred to you, since we Americans are still new to this chip business.

A Chip + Signature card is something like the American Express Delta SkyMiles card. You can use it abroad but there is no PIN, so you can’t use it on kiosks or automated machines. There needs to be someone who verifies your signature. To make it more confusing, some cards support both Signature and PIN, but prefer one over the other (that’s called “CVM priority”, explained below). Honestly, it’s hard to tell at first glance.

I found several excellent resources: this FlyerTalk thread on US chip card availability and this Google Spreadsheet listing all known chip cards in the US. These two resources were invaluable to understanding this topic and I highly recommend reading through the first post on the thread.

The spreadsheet helpfully lists the priority of Card Verification Methods (CVMs) a card supports. Some support many, some only one, and some in a different order. Ugh!

What does CVM priority mean?

I know, I know, your brain is hurting right now. Mine did too. Let me try to break it down. I’ve even included some terrible Bitstrips for visual aids.

In the spreadsheet there are 4 types of verification methods mentioned:

• No verification
• Chip + Signature
• Chip + PIN (online)
• Chip + PIN (offline) or simply “Chip + PIN”

I’ll let the Flyertalk thread explain the differences:

What is the difference between Chip-and-Signature and Chip-and-PIN?

You insert the chipped card into the slot. The physical contact terminal will read the EMV chip and the terminal will automatically read the preferred cardholder verification methods (called CVM) for that card.

Chip-and-Signature means that the terminal will printout a receipt for you to sign. This is the most prevalent authentication for most US issued EMV cards. Chip-and-Signature helps in a way that it will get through to face-to-face merchant transactions where you and the merchant do not speak the same language.

Chip-and-PIN means that the terminal will prompt you to input a PIN for authentication. Some credit union issued credit cards will have this CVM as secondary if Chip-and-Signature cannot be done. Chip-and-PIN is the more prevalent method of authentication used outside the US, especially in transaction environments where no human interaction is needed (i.e. automated gas pumps, toll roads, train kiosks, etc.).

The Google Docs spreadsheet will list which CVM are used in the EMV cards listed. Some cards can only do Chip-and-Signature. Other cards can do both Chip-and-Signature and Chip-and-PIN. And others might have a third option called No CVM (no authentication needed) which is reserved for low value transactions.

What it doesn’t mention is the difference between offline and online PIN. Normally, cards store the PIN on the chip, so this is called an offline transaction. On some US cards, the PIN is not on the chip, so the terminal needs to go check the authorization system. This can be a problem because many terminals in France are offline (like the SNCF kiosks).

The following should help clarify even further:

No verification (CVM) means people have reported that you don’t need a PIN if a transaction is lower than a certain amount (e.g. 10 euros). Your mileage may vary on this one!

If a card has Chip + Signature priority it just means you need to sign the receipt. This won’t work for unmanned kiosks because there’s no one there to verify, so then the card falls back on any other listed methods.

Chip + PIN is typical on European cards and is preferred.

So, what’s best?

What’s best is choosing a card with Chip + PIN (offline) priority at the top. That way it’ll work like European cards where the PIN is stored on the chip and it uses PIN only. Unfortunately, looking at the current state of cards in the US, there are only two offerings that can meet this requirement: BMO Diners Club Card Premier and UNFCU Azure/Elite cards.

This leaves a couple options:

1. Apply for one of those two cards if you absolutely want no headaches
2. Apply for one of the other cards that supports Chip + PIN (and preferably offline)
3. Open a bank account when you’re in France and get a debit card (carte-bleue or CB).

Honestly, if you can do number 3, you’re probably better off. The issue is, you may need proof of residence to open a bank account which you might not have if you’re renting through a landlord (our situation) or don’t plan to stay long (most people).

Personally, I went for option 1 and applied for the BMO card. It has decent benefits, no foreign transaction fee, and is Chip + PIN priority which means I can continue to use it when we travel to other countries without worrying. I’m still in the approval process and will update if that changes.

Update (11/24/2014): I received my new Diner’s Club card, it’s just what I was looking for. It has a magnetic stripe for swiping and also has a proper PIN. It’s a World MasterCard so we shouldn’t have any trouble in France.

If you aren’t worried too much about kiosks or carrying some coins/cash, I would definitely go with option 2. If I had done that, I would go with the Barclaycard Arrival+ or the USAA World MasterCard. It’s up to you, though. There are plenty of reviews on all these cards!

Phew, that was a lot

I really encourage you to research and weigh the pros/cons of each approach. What I chose may not be best for your situation. You should also remember applying for credit will generate a hard inquiry on your credit report… just something to keep in mind.

If you have more advice or wisdom, please share it in the comments below.

Note: Since we haven’t yet arrived in France, I can’t actually speak to the success of my choice. I will update this post once we’ve actually been in France to test out my theories.