That little magnetic strip on the back of your credit card is looking more and more like an endangered species, as more cards are embedded with EMV chip technology, making them into “smart cards” that allow for contactless payments.
EMV chips are microprocessors that hold all your card information, like a magnetic strip, but more secure and easier to use. Instead of swiping your card, simply wave it in front of the card reader and your payment information is recorded.
This week, U.S. Bank is rolling out a new card for travelers, the Global EMV card, which will be available through the Visa or MasterCard platforms. It will combine magnetic strip technology with EMV chips, making them multipurpose enough to work across the United States, where EMV chip use is still not standard, as well as around the globe.
Around the World With EMV
The Global EMV card will be offered as an option on most commercial U.S. Bank credit cards, and will come standard on the Executive and Executive Platinum cards. Jeff Rankin, senior sales and marketing officer for U.S. Bank Corporate Payment Systems, says that for international travelers “the U.S. Bank Global EMV Card delivers greater convenience and compatibility with overseas merchants. It allows cardholders to go anywhere in the world with confidence.”
This isn`t U.S. Bank`s first foray into the world of EMV, however. Last summer they unveiled the EMV chip on their FlexPerks Travel Rewards Visa Signature card. This card is aimed at frequent travelers, which makes sense since the technology is widely used in other countries and customers might have trouble using their non-EMV cards when traveling through Europe, Canada, and other places where EMV is standard.
FlexPerks Travel Rewards from Visa Signature
Speaking of travel and credit cards, how does the FlexPerks Travel Rewards card stack up? Let’s take a quick look.
- Like many high-rewards travel credit cards, the FlexPerks card has an annual fee. The $49 yearly charge is waived for the first year, and after that you can choose to apply your reward points to cover the fee.
- The APR of 13.99% to 23.99% will vary depending on your credit history, and is a little on the high side, but that only matters if you plan to carry a balance.
- Surprisingly, there is a foreign transaction fee on this card. A credit card aimed at travelers could be expected to feature no foreign transaction fee, but this one does not. You`ll pay 2% for each overseas purchase using American dollars and 3% for foreign transactions using foreign currency.
- The balance transfer rate on the FlexPerks card is 1% above the industry average, at 4%, as is the cash advance fee – also 4%. This probably isn`t the best card to use if you`re planning to transfer a balance or get cash advances.
Travel to Rewards Land
So if there`s an annual fee, a higher-than-standard balance transfer and cash advance fee, and foreign transaction fees, where`s the benefit of this card? We haven`t talked about the rewards yet – so let`s get to the good stuff.
- When you spend your first $500, you`ll get 10,000 bonus FlexPoints, on top of your standard 1 FlexPoint per $1 spent.
- In whatever category you spend the most (gas, groceries, airline travel), you`ll earn double FlexPoints.
- Every year that you spend $24,000 on your FlexPerks card, you`ll get 3,500 extra points.
You can redeem your FlexPoints for cash or for airline tickets, but you`ll get more out of them if you buy airline tickets. 20,000 FlexPoints can be redeemed for $200 in cash, but if you put that amount toward a plane ticket purchase, you`ll get $400 toward the total. Plus, you can use that reward on over 150 airline partners, with no blackout dates or redemption fees.
Taking some average spending numbers, let`s say that in the first year you have the card, you spend $6000 on groceries, $2000 on clothes, $2500 on entertainment, and $5700 on transportation. Double your grocery rewards, since you spent the most in that category, and add in your 10,000 bonus points. The calculation looks like this:
12,000 + 2,000 + 2,500 + 5,700 + 10,000 = 32,200 FlexPoints
Since 30,000 points can be redeemed for a ticket up to $600 in value, you`ll most likely be able to use that reward for a free round-trip ticket to the beach. And one other thing – when you go, you`ll get a $25 airline allowance award which can be used for baggage fees or in-flight food and drinks. Pretty sweet!
Wave Hello to the Future
As EMV chips are embedded in more U.S. credit cards and become industry standard over the next few years, we`ll get used to waving our cards in front of readers instead of swiping them, making EMV chip technology literally the wave of the future.