Dollars in cash are no longer something I bring to the USA. You can easily pay with your card through your phone at coffee shops, stores, and even concession stands at stadiums. It’s more convenient, faster, and cost-effective. You can always withdraw backup cash from an ATM. In this article, I’ll share some cultural differences, my backup options, and tips on how to save up to 5% on every payment.
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Table of Contents
Which Payment Card to Bring to the USA
Google Pay, Apple Pay, or Embossed CardIn the USA, you can safely use a card through your phone. Contactless payments via Google Pay and Apple Pay are widely supported. Some payment terminals are directly linked to the merchant’s loyalty programs. For instance, I used the same card four times at a coffee shop and received a free coffee on the fifth transaction.
Still, I recommend bringing an embossed payment card as a backup in case the merchant does not have a contactless terminal.
Mastercard, Visa, and American ExpressMastercard and Visa cards are accepted by 10.6 million merchants in the USA, which accounts for 99%. American Express cards are accepted by 10.5 million merchants. Therefore, the choice of card network is practically irrelevant.
Debit Card vs. Credit CardThe terms credit, debit, and payment card are sometimes incorrectly interchanged, even though there are significant differences:
- Debit Card (referred to as a “debit card” in the USA) is typically issued with all bank accounts. With a debit card, you can only spend the money available in your account.
- Credit Card (known as a “credit card” in the USA) is essentially a loan. Issuance usually requires proof of income. With a credit card, you’re spending the bank’s money, which must be repaid within a set timeframe to avoid accruing relatively high interest rates. Credit cards are more common in the USA.
- Payment Card is a general term for both debit and credit cards. In the United States, payment cards are sometimes incorrectly referred to as “credit cards,” regardless of the type.
For routine payments in the USA, a debit card will suffice. However, if you plan to rent a car, you’ll likely need a credit card. Some car rental agencies do not accept debit cards or impose various conditions. Either bring a credit card or thoroughly verify the rental agency’s terms and conditions.
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The Best Card for Payments in the USA
How to Save on Card Payments in the USADifferent banks convert payments in USD to euros at varying rates. The exchange is always based on the central bank rate, plus a fee charged by the card network and the bank’s margin. This margin covers system operations, staff, customer support, etc. The margin on USD payments ranges from 2.5% to 4%, depending on the bank and card type.
You can save on the margin by using cards from companies like Revolut or Wise, where you can load dollars directly. These modern, branchless companies operate with lower costs. Their rates are comparable to those of the central bank. Both cards are available in digital and physical formats.
Compared to a debit card from a traditional bank, you can save up to $34 on every $1,000 spent.
Option 1: RevolutRevolut is a virtual bank founded in the UK in 2015. It offers free accounts in over 30 currencies, with exchange rates close to the central bank’s rate.
Revolut offers Mastercard payment cards in both virtual and embossed physical formats. The Revolut Disposable Card is particularly noteworthy, as its number changes after each payment. I use it for various trial services online. It allows successful card verification without risking unauthorized charges.
I use Revolut for payments and purchases in foreign currencies, saving roughly $0.03 per dollar compared to my ČSOB card. Additionally, all foreign payments are separated from my main account.
It’s crucial to avoid currency exchanges to USD over the weekend, as Revolut charges an additional 1% fee. This fee protects against potential currency fluctuations that might occur when markets reopen on Monday. Revolut processes the exchange at the current rate at the time of the transaction (e.g., on Saturday) but settles it when markets open on Monday.
A free Revolut account allows you to exchange up to €1000$1,066 per month into another currency without fees, such as dollars. You can even set a condition to purchase dollars only when the rate drops below a certain level. If your trip to the USA is months away, you can buy dollars gradually and save even more.
Option 2: WiseWise, previously known as TransferWise until 2021, was founded in the UK in 2011. Accounts are managed via a mobile app or online. Opening and maintaining a Wise account is free, though some transactions, like money transfers, may incur fees. Setting up an account takes about 15 minutes.
The virtual Wise Visa card can be used for payments immediately after account approval, with no additional fees for issuance. You can also request an embossed Visa card, which requires a shipping fee. The card typically arrives within two to three weeks.
Our company uses Wise for international payments. In our first year, we saved $152€142.90 on transaction fees alone, with additional savings from exchange rates comparable to the central bank’s rates.
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Always Choose Settlement in Dollars at the Terminal
Some payment terminals and ATMs offer the option to pay in U.S. dollars or your home currency (e.g., euros). In such cases, the screen will display the amount to be charged in euros.
If you are given the choice, always select payment in the local currency (U.S. dollars) so that your bank’s exchange rate is applied. Choosing euros would result in a less favorable rate determined by the terminal operator. Based on my long-term experience, the difference can be up to 5%.
This option, known as “Dynamic Currency Conversion (DCC),” is something I’ve encountered in Austria, Portugal, and Greece as well. You can ask your bank to block the DCC service or always choose settlement in the local currency.
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How to Pay by Card in the USA
When paying in a store, you may be asked whether your card is a debit or credit card. If you truthfully respond with “debit,” you might confuse the cashier. They are often unfamiliar with such distinctions, and I was once even refused because of it.
It’s better to say it’s a credit card, even if it’s a debit card. Some European debit cards behave like credit cards in the USA. Americans are less accustomed to cards that require entering a PIN. If the payment fails, inform the cashier that a PIN needs to be entered. Gas station pumps also require you to input a ZIP code; often, entering your home postal code or a made-up one (like 90210) will suffice.
If you’re paying with a physical card on an older terminal, swipe the magnetic stripe through the terminal’s slot. The cashier might ask for an ID (such as a passport) and request you to sign the receipt.
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Dual Pricing and Using an ATM Instead of a Card
Merchants in the USA pay a fee to the bank for each card transaction. As a result, you might encounter a minimum purchase requirement for card payments or dual pricing. For example, I noticed this at a gas station, where card payments incurred a higher price.
Some clubs and restaurants do not accept payment cards, but there’s often an ATM available in the corner where you can withdraw cash.
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Prices in the USA Are Displayed Without Tax
Prices in the USA, with the exception of fuel or prescription medication, are always shown without sales tax. The tax is added to the total at checkout. For instance, if the price tag says $10.00, you might pay $10.88 at the register.
The sales tax rate varies by state, which is one reason prices are displayed without tax. Another reason is that lawmakers want consumers to be aware of how much tax they are paying.
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FAQs About Paying by Card in the USA
Can I Tip with a Card?
Most merchants allow tipping by card. You’ll often encounter a passive-aggressive prompt during payment, asking you to add a tip. The screen might show preset options (up to 30%) as well as a “Skip” button.How Much Is the Fee for Card Payments in the USA?
I don’t know of any bank that charges a fee for card payments abroad—although it’s not impossible. Some merchants might charge a fee, especially for small purchases of just a few dollars. The exchange rate used by your bank usually has a greater impact than any card payment fee. The best rates are offered by Revolut and Wise.What Are the Fees for ATM Withdrawals in the USA?
ATM withdrawal fees vary depending on the bank, account type, and ATM used. Some charge a flat fee, while others charge a percentage of the withdrawn amount. The exchange rate used for currency conversion also plays a role, just as with card payments. Some ATMs also offer unfavorable settlement in euros—be sure to decline and select settlement in dollars.What Card Do I Use Abroad?
I use a Revolut card on my phone when abroad because it offers a better exchange rate. I also use my Visa Infinite debit card and Mastercard World Elite credit card from my bank.
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