French retailers get a flea in their ear: Andrew Bibby advises Britons going abroad about the lack of chips

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BRITISH holidaymakers who are planning to use their credit cards in remoter parts of France this summer may find themselves handicapped by the lack of a flea. La puce - the flea - is the nickname given to the electronic microchip which all domestic credit cards in France now carry, a security measure introduced about 18 months ago.

French cardholders now authorise a majority of their credit card transactions electronically, by tapping in a personal identification number on a retailer's terminal. Offered chip-less credit cards from Britain, some French retailers have been unaware how to process payments and have rejected the cards as invalid.

According to Visa International, the problem should only affect a very small number of visitors. 'Some French merchants who don't often see UK cards don't realise that they have magnetic stripes, not microchips. But any valid Visa card is valid in France, and any French merchant who displays a Visa sign is legally obliged to accept it,' said a spokesman. All French electronic terminals should be technically equipped to deal with magnetic stripe cards.

The French Tourist Office last year issued a useful phrase for British cardholders facing resistance from French retailers (see blob). However, there may still be problems in using credit cards at unstaffed petrol stations. 'You might find cash is a better option there,' said Visa's spokesman.

The relatively slight risk of a possible problem with la puce should not discourage British visitors from taking their plastic money with them. Both Visa and MasterCard (Access) cards are widely accepted (Visa claims about 500,000 outlets, for example) and can be used to get cash from banks and about 13,000 cash machines. Some British-issued Eurocheque guarantee cards can also be used for cash withdrawals from about 11,000 machines (though the annual fee, typically pounds 6- pounds 9, makes this a less attractive option). Cirrus-branded cash cards, newly available from NatWest and Midland, are less useful, and will obtain cash only in Credit Mutuel's network of 1,800 machines. Finally, leave your Link- branded cards at home when crossing the Channel - they are useless in France.

All credit card issuers add their own hidden charges during the exchange conversion process before card transactions overseas are debited to your account. The total charged varies between card companies and is typically between 2 and 3 per cent, though Leeds Permanent's Visa card is good value (in Europe and Africa, at least) at 1.5 per cent. As Liz Phillips, director of the Credit Card Research Group, points out these charges are based on underlying money market, rather than tourist, exchange rates. 'In most instances, credit cards are the cheapest way to pay, typically about 1 per cent to 5 per cent cheaper than any other method,' she claims.

If you carry both Visa and MasterCard (Access) plastic, it may be preferable to try your MasterCard first. Differences in the way the two international organisations process transactions means that MasterCard can often work out a few pence cheaper.

Traveller's cheques are likely to be a much more expensive option for holidays in France this year. Previously, traveller's cheques - provided they were denominated in francs rather than sterling - could often be exchanged without charge in French banks. This is now changing. Thomas Cook says that Societe Generale has imposed a Fr25 fee (approximately pounds 3.05) this year, whilst Banque de France has introduced a levy of 1 per cent commission. Avoid Credit Agricole, where the charge is a swingeing Fr50 ( pounds 6.10) per transaction. (Thomas Cook and American Express cheques can be encashed without charge at their own offices in France.)

Only in Euro Disneyland, true to its American parentage, can holidaymakers with franc traveller's cheques use them as cash - though given the resort's high costs, this may be small consolation.

The French Tourist Office suggests that you show the following phrase, with your passport, to fraud-conscious retailers: 'Les cartes anglaises ne sont pas des cartes a puce, mais a piste magnetique. Ma carte est valable et vous serais reconnaissant d'en demander la confirmation aupres de votre banque ou de votre centre de traitement. (English cards have a magnetic stripe, not a microchip. My card is valid. Please confirm this with your bank or processor.)

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