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  Mike Todd

Paying by Credit Card

There's little doubt that the credit card is the most useful means of payment when on holiday in the US. They're accepted almost everywhere, and in some cases they're almost obligatory. Because they're so important, it may be useful to carry more than one. If for some reason you hit problems with one of them, you'll always have the other to fall back on. And always make sure that your card has plenty of credit on it - a surprising number of people find that they thought they had sufficient credit, but "hidden transactions" (see below) used it all up.

Sometimes you need a credit refund on your card, and this is fraught with problems. Maybe you've had to get a refund for something you've returned to a store, or perhaps the store has made a mistake and had to reprocess the transaction. These can end up costing quite a lot of money (see "refunds" below)

Because credit cards are so much part of everyday life, it's easy to overlook some of the problems. Here are just a few things to watch out for.

Which card?

Try to stick to Visa or Master-Card. Other cards (such as American Expressed and Diners Club) are recognised, but not nearly so universally.

How much?
The exchange rate that you're charged will be the rate in effect when the transaction reaches your account. And b
ear in mind that your credit card company will almost certainly add a service charge or commission to every dollar transaction. You should check with your card company before you go to find out what this will be, or shop around for a card which does not make this charge (there are very few of them around).

Hidden transactions
When you register at a hotel or rent a car, an imprint of your card will be taken and authorisation will be obtained for an amount to cover your stay. Although no money is taken from your card, this authorisation will usually "freeze" that amount until you leave (or later).

For instance, if you're staying for two weeks in a hotel, the hotel is likely to seek authorisation for the room rate (if not already paid) plus average room charges. A car rental company is likely to get authorisation for a substantial deposit to cover any costs that you might incur (including speeding or parking fines). In some cases this might eat up most of your credit, and there are numerous stories of families arriving in the US, getting their rental car and registering at their hotel only to find they have little or no credit left on their card!

In general, when you pay your waiter for a meal in a restaurant with a credit card, the card will be taken away and they will get authorisation for a little more than the amount you owe (but no charge will be made against the card at this stage). You will then be presented with the credit card receipt, which will usually have a place for you to enter a tip (if you choose to do it this way). You must fill in the final amount (even if you leave the tip in cash, and the tip on the card is $0) and sign the receipt, at which point you can leave (don't forget to pick up your card!)

The restaurant will then complete the transaction with the actual amount you filled in. If you didn't fill it in, beware! An unscrupulous waiter or restaurant could fill in what they like.

Gas Stations
Some gas stations allow you to "pay at the pump" by inserting you card. This facility is great for Americans, but it is sometimes not so easy for the visitor.

Firstly, your credit card company may simply refuse the transaction (this has happened to me on numerous occasions). The pump will then say "please see attendant", or something similar, and you'll have to take your card inside and have it processed manually. There's nothing untoward about this, but it can come as a shock.

Secondly, some gas stations are now insisting that you enter your Zip Code as a security measure. Since few machines have alpha-numeric keypads, it's unlikely that your Birtish post-code is going to be of much use, and again you'll have to have the card processed manually.

Also note that some gas stations which don't have pay-at-the-pump machines may ask you to "pay before you pump". This applies whether you're paying by cash or credit card, and may only apply after dark. It's their way of preventing you running off without paying. You'll normally prepay a specific amount, but if you want to fill up and don't know how much gas you'll need, you'll have to leave your credit card with the attendant - I do not recommend this!

You may well be asked for identification when using a credit card. You'll need your passport or UK picture driving licence, very little else will be accepted (although the paper UK driving licence may be). You may also be asked to give your zip code or phone number as a security check, but if you say that you're just visitig then they'll bypass that.

Losing you card
It's very wise to keep a separate note of your credit card company's emergency contact number, and your card number, so that you can advise them if the card is lost or stolen as quickly as possible.

Credit card slips
Most credit card transactions these days are done electronically. But if you find you're signing one of the old-style multiple-copy slips, always insist that they destroy the carbons in front of you.

When you get home
You should always keep your credit card receipts from your trip, and when you return home, check them against your credit card statement as soon as you can. Transactions may take a few days to filter through, but it's important to be vigilant to spurious transactions.

When you buy something, you're charged an exchange rate for the $-to-£ conversion, but the exchange rate for the refund on a $-to-£ conversion will be different.

As an example, I once bought a gift for someone for $100 - the exchange rate was $1.65 and my credit card was billed £60.61, plus 91p commission. However, I had to take it back, and the refund was at an exchange rate of $1.68, making a refund of £59.52. I lost £2 on the deal

Even worse, many years ago I was mischarged $780 for a hotel room instead of $78. In fact I didn't know this until I returned home and discovered that the hotel had taken $780, then had taken $78, and a while later had credited the $780. In this case, because the dollar had weakened, I lost nearly £50 on the deal!

If possible, get the merchant to VOID the transaction rather than refund it (this may only be possible for a short time after the transaction). But if it does happen, you can always try to get your credit card company to refund the difference - there's no obligation on them, but in both the above cases they did it without question.