Finally! A Chip-and-Pin Option for U.S. Cardholders

Finally—a U.S. bank will start issuing chip-and-pin credit cards that earn airline miles! The bank is Chase and the card is British Airways Visa. The new cards will be dual purpose, with both a magnetic stripe, for use in the U.S., and a chip for use in most other places. The press release didn’t say when Chase will start issuing the cards or how existing cardholders can apply for a replacement; we’ll update this report as soon as Chase replies to our questions.

We’ve reported extensively on the blank wall many U.S. travelers have hit when trying to use their U.S. cards in Europe—especially in unattended situations where an automated credit-card purchase is the only way to buy a rail or metro ticket, pay a highway toll, or get gasoline from an after-hours automated pump. Most of Europe and much of the rest of the developed world has already switched verification systems from the magnetic stripe, where the merchant swipes the card through a reader and you sign a receipt, to the chip system, where the merchant’s terminal reads a signal from the chip in the card and you enter a confirming PIN. As long as you’re dealing with an actual person, you can still use a stripe card—maybe after a bit of an argument—but you can’t argue with a machine that just displays the message “card declined.”

Many industry watchers have been astounded that U.S. banks have been so slow to issue dual-system cards—especially banks that co-brand cards with airlines, hotel chains, and other travel suppliers. Did it really require years of soul-searching for banks to figure out that people who have cards co-branded with big travel companies are likely to want to use their cards when they travel—even outside the U.S.? Feh.

The new announcement should give a bit of encouragement to those of you who have credit cards with other travel companies. Now that Chase has finally made a move, maybe, just maybe, the other big banks will get the message.

Chase and British Airways (BA) are hyping the new card along with the overall redesign of BA’s frequent flyer program. You can leave exploring the details of the new program to Tim Winship. But in case you decide to quickly apply for the new card, keep in mind that, whatever BA names its program, it still adds a fuel surcharge to supposedly “free” award travel—a real scam and a deal-breaker to many of us.