Today a reader sent me an email about “Verified by Visa” service. He obviously didn’t know anything about the Verified by Visa and thought it was a phishing site. I think it is necessary to talk about what the Verified by Visa is for and how it works. My friend actually placed an order at Newegg.com to purchase the Panasonic Lumix DMC-TZ5 digital camera and he didn’t know what the Verified by Visa was, as a result, he placed the order twice at Newegg.com.

So what is Verified by Visa?

Verified by Visa is free to Visa cardholders and was developed to help prevent unauthorized use of Visa cards for online shopping. The cardholders can choose a password at through activation of the Verified by Visa service. Only the cardholders remember the password. Thus Verified by Visa protects Visa cards with personal passwords, giving cardholders reassurance that only they can use their Visa cards online. Once your Visa card is activated, your card number will be recognized whenever it’s used at participating online stores (Click here to see the participating stores.). A Verified by Visa window will automatically appear and your Visa card issuer will ask for your password. You’ll enter your password to verify your identity and complete your purchase.

For the online stores that are not participated in the Verified by Visa service, you can use your Visa card as normal.

The Verified by Visa is an attempt by Visa to reduce online fraud and identity theft. However, there are some problems associated with it. Because the Verified by Visa step comes as a pop-up window and general shoppers usually think pop-up windows are from phishing sites. Actually, if you look at the domain of the pop-up window, you will find that the domain is not from the site where the user is shopping, not from the card issuing bank, or visa.

Actually, Verified by Visa is a 3-D Secure protocol which is an XML-based protocol used as an added layer of security for online credit and debit card transactions. The 3-D Secure protocol was developed by Visa to improve the security of Internet payments and offered to customers as what we now know Verified by Visa service.

How does Verified by Visa work?

• Activate your Verified by Visa service in the Verified by Visa program now or while shopping online. You have to provide your visa card account number and last 4 digits of your social security number along with other information. It’s easy and only takes a few moments to activate your card. You can do it right here on the secure Visa site or when prompted during the checkout process at one of our participating online merchants. Either way, your information is protected. (link to activate the service: https://verified.visa.com/aam/data/default/landing.aam?partner=default)
• Shop at participating online merchants with Verified by Visa symbol.
• Use your Visa credit card or debit card at the checkout and then put in your Verified by Visa password. Once your password is recognized by the transaction system, your order will be successfully placed.
• There is no charge — Verified by Visa is free to Visa cardholders.

Verified by Visa used to pop up at many online merchants which participate in the program. Right now, this service seems not so popular and not all online retailers are using it. But the Verified by Visa still is an important and effective way to reduce your risk when you place an order at the websites that out of US. Many payment network might still require you to use Verified by Visa service.

It is no doubt that you can use your credit card for an international trip. But some of you may not know that many credit card issuers will charge a certain amount of transaction fees for using your credit card aboard. The fees may be up to 8% depending on the credit card terms. So before you leave, you’d better read your credit card agreement from your credit card issuer carefully and find out the one with lowest transaction fees.

Hereby I did a little research and summarized the transaction fees from many US credit card issuers to help you choose out the best credit card for an international trip. Another thing you should be aware is your credit card account might be frozen by your credit card issuer sometimes due to fraud prevention.

Foreign transaction fees are charges added to the cost of purchases made in a foreign currency. The card issuers said the cost covers the service of translating the price of the purchase into U.S. dollars, which is the amount reflected on a billing statement. The foreign transaction fees are varied for different credit card issuers and different types of credit cards.

Whenever you make a purchase at foreign countries with a Visa or MasterCard, you will be automatically charged by Visa or MasterCard Networks. Card issuers will also add some fees for foreign transactions. For example, Chase Sony Card will charge you 3% transaction fee for an purchase made outside US. This 3% includes the above mentioned 1% fee charge by Visa Network. But there is an exception which makes it a very good credit card for using internationally. All Capital One credit cards will get 1% refund for any transactions made using a foreign currency or outside US. The HSBC Household/Orchard Bank credit card with 2% cash back used to not charge additional 2% fees. So with 2% cash back and 1% transaction fee, you can still get 1% cash back for using that credit card aboard. All American Express cards will be charged 2% transaction fee. Discover Card will not charge foreign transaction fees for your purchases made using foreign currency or outside US. So all Discover Cards are good choice for using aboard. The only downside for using Discover Card is they don’t have too many networks outside US. You can only us Discover card at limited countries. While Visa and MasterCard are widely accepted in the word.

Some picks of credit cards for international use:

Capital One No Hassle Cash Rewards Card (Or Capital One No Hassle Miles Rewards Card): There is no annual fee associated with this card. There is also no foreign transaction fee for using aboard. You can accumulate cash rewards for using this card everywhere in the world. You can choose either the cash version or mile version.

Discover More Card: There is no foreign transaction fee for using aboard. You can also get rewards for shopping everywhere in the world. No annual fee. If you are a student, you should choose the Discover Student Card which is specifically designed for students. You may also consider the Discover Miles Card for accumulating miles. But you should expect the situation that you can’t use your Discover Card on an international trip.

If you shop a lot at Amazon.com, the new Amazon.com Rewards Visa Card is a good choice for you. I have a brief introduction of this credit card back in this July. (Maybe this is the first report of the new Amazon.com Rewards Visa Card.) I also pointed out that you can get $100 off your Amazon Kindle with a new Amazon.com Visa Card. The new Amazon.com visa card will give you 6 points for every dollar spent at Amazon.com for the first 90 days. This is a great feature which will save you a lot for the first 90 days.

Today I receive an email from Chase Amazon.com Visa Card indicating that I can upgrade my Amazon.com Visa card for free! This upgrade offer is targeted to current Amazon.com Visa Card holders.

After upgrading your Amazon.com Visa Card:

For first 90 days, you can get 6 points for every Amazon purchase, 4 points for gas/drug store/dining purchases and 2 points for everything else. After 90 days, you can continue to get 3 points at Amazon.com, 2 points for gas/drug/dining and 1 point for everything else.

There will be no new card issued to replace your current Amazon.com Visa Card. There is no hard pull during upgrade process. All you have to do is call customer service at 888-247-4080 and simply tell them you want to upgrade your Amazon.com Visa Card. After you get approved, it will need 3 days to take effect.

I would say this is a good promotion since the Thanks Giving and Christmas are coming in 3 months. If you shop regularly at Amazon.com, you can save a lot during the 90 days promotion period.

I always use this Amazon.com Visa Card as my primary payment method. The other Chase credit card that I use frequently is the Chase Freedom Card. With a Chase checking account, you can get 3% cash back from 5 pre-set categories. It’s pretty easy to accumulate $50 and redeem it. A lot of MyCardBlog.com readers have this credit card. I you still don’t have one, you’d better get one. You will be surprised how fast you can accumulate your cash rewards.

There is not doubt that credit card is one of the most powerful purchasing tools in the world. You can use a credit card to buy groceries at your local grocery stores, pay bills online, purchase electronics like MP3s, HDTVs, laptops etc., and fill your tank at pumps. Billions of transactions are done through credit card each year at US. Credit card companies even offer sign-up bonuses and promotional rates now and then. If you are a smart credit card user, you can save a lot of money by choosing a right credit card for you. However, there are still some common basics about credit card that you might not know.

1. Merchants can’t require a minimum transaction amount!

There are many grocery stores or Chinese restaurants that require you to pay by cash if your purchase is under a minimum amount pre-set by the store. This is obviously violate the credit card issuer’s merchant agreement. Under no conditions that a merchant can refuse to accept a credit card transaction because of a minimum.

Visa indicates that: Always honor valid Visa cards in your acceptance category, regardless of the dollar amount of the purchase. Imposing minimum or maximum purchase amounts in order to accept a Visa card transaction is a violation of the Visa rules.

MasterCard indicates that: A Merchant must not require, or indicate that it requires, a minimum or maximum Transaction amount to accept a valid and properly presented Card.

Anyway the merchants can not establish minimum or maximum amounts as a condition for accepting a Card. You can find similar requirements from Discover card and American Express.

2. Merchants have the right to refuse the unsigned credit card.

When you receive the welcome package from your credit card issuer, you can see “Not Valid Unless Signed” at the back of your credit card. This is quite understandable. The reason why the credit card companies require you to sign at the back of your credit card is to minimize the risk of credit card fraud.

Visa indicates: While checking card security features, you should also make sure that the card is signed. An unsigned card is considered invalid and should not be accepted. If a customer gives you an unsigned card, the following steps must be taken: 1). Check the cardholder’s ID. 2). Ask the customer to sign the card and then compare the signature on the card to the signature on the ID. “See ID” or “Ask for ID” is not a valid substitute for a signature.

3. Merchants can not charge a surcharge for using a credit card.

I know some Chinese restaurants always charge extra amount of money for using a credit card as payment. $0.5 is very typical for them. This violates the merchant agreement!

Visa requires: Always treat Visa transactions like any other transaction; that is, you may not impose any surcharge on a Visa transaction. You may, however, offer a discount for cash transactions, provided that the offer is clearly disclosed to customers and the cash price is presented as a discount from the standard price charged for all other forms of payment.

MasterCard requires: A Merchant must not directly or indirectly require any Cardholder to pay a surcharge or any part of any Merchant discount or any contemporaneous finance charge in connection with a Transaction. A Merchant may provide a discount to its customers for cash payments. A Merchant is permitted to charge a fee (such as a bona fide commission, postage, expedited service or convenience fees, and the like) if the fee is imposed on all like transactions regardless of the form of payment used, or as the Corporation has expressly permitted in writing.

4. Merchants cannot require you to present ID

I have two posts about how to deal with “Show ID with Credit Card” problem. (post 1 and post 2) Some merchants may require you to present your ID at  checkout but it’s a violation of the rules.

Visa: When should you ask a cardholder for an official government ID? Although Visa rules do not preclude merchants from asking for cardholder ID, merchants cannot make an ID a condition of acceptance. Therefore, merchants cannot refuse to complete a purchase transaction because a cardholder refuses to
provide ID. Visa believes merchants should not ask for ID as part of their regular card acceptance procedures. Laws in several states also make it illegal for merchants to write a cardholder’s personal information, such as an address or phone number, on a sales receipt.

5. Merchants are not allowed to place a hold for the estimated tip

The estimated tip is really common nowadays at restaurants. For example, if you go to dinner and final amount is $200 and you pay with a credit card, the restaurant might  try to “authorize” your card for $230–a 15% tip. Believe it or not, it’s a violation! What will happen if you don’t like their services and want to offer only 10% tip? Or you may want to leave cash tip! There is no way that a merchant can hold an extra amount of money to estimate your payment!

Visa requires: For restaurant, taxicabs, limousines, bars, taverns, beauty/barber shops, health/beauty spa merchants transactions with a Visa credit or debit card, authorize only for the known amount, not the transaction amount plus estimated tip. Cardholders now have the ability to check their credit or checking accounts almost instantaneously via phone, the Internet, or an ATM. Consequently, an authorization that includes an estimated tip can reduce a cardholder’s available funds or credit by an unrecognizable or unexpected amount.

If you meet any of above mentioned circumstances, you can call Visa, MasterCard, Discover Card or American Express. Or you can call the numer at the back of your credit card.