What You Need to Know About Chip-Enabled Cards
Jackie here. Have you been using your new chip card? These new chip-based cards are more secure than the magnetic strip cards alone, but more is still needed. The new chip cards aren’t the magic solution to credit card fraud.
How Are Chip Cards More Secure than Magnetic Strip Cards?
Chip cards look much like a traditional magnetic strip card with one difference: a golden chip on the front of the card. This chip is called an EMV chip (stands for Eurocard, Mastercard, Visa) and contains the information needed for a card to work properly. Today’s chip cards have both a magnetic strip (to be used when a terminal isn’t chip-enabled) and a chip, but as more retailers become compliant cards may eliminate the magnetic strip.
The technology in the chip protects PoS transactions and consumer data. The chip transactions also generate a special one-time code that further protects your information.
The Security Limitations of Chip Cards
While chip cards are more secure, they aren’t fraud proof. Lost and stolen cards can still be used for in-store and online purchases. Additionally, whenever a transaction is performed using the magnetic strip, data can be captured if thieves have installed malware on the payment terminal. Many of the chip cards used in the U.S. don’t have a PIN feature, an important added layer of protection that helps to ensure that only the registered user can use the card.
How to Protect Yourself
Now that you’ve got a new chip card in your wallet, here are some easy tips to protect yourself and reduce your chances of credit card fraud.
Use Chip Readers When Possible- If you can, insert your card into the chip reader rather than swiping your card. This limits the exposure of your sensitive data.
Be Careful with Your Card- Once you get a card, take care of it. Activate it promptly and store it securely. If you do lose your card, report it as soon as possible.
Check Your Statements- Check your bank and credit card statements often. If you notice a problem, report it.
The new chip cards are more secure, aren’t foolproof. It’s important to still keep an eye out for suspicious transactions on your statements. October 1st, 2015 marked the day when parties who do not support EMV technology may be held liable for fraudulent charges. Despite this date, many card issuers and retailers will slowly transition to the EMV technology in the coming months and years.
Updated 1/15 to provide clarity around the October 1st deadline.