What to look for when you get an EMV-chip card
McLEAN, Va. (6/9/15)--The next credit or debit card you receive from your card issuer might look different from the one you currently are using. You’ll notice a small “chip”--part of the migration to EMV technology--embedded in the plastic.
Older cards use a magnetic stripe on the back to permanently store financial information, making it an easy target for data thieves. Forty-seven percent of the world’s credit card fraud occurs in the United States, where magnetic stripe cards are still common. As more consumers use the new chip cards, this percentage should decrease (Roadwarriorvoices.com June 1).
The EMV chip creates a unique, one-time transaction code. If a hacker should steal the chip information from a transaction, it would be useless because the transaction code is only valid for a single purchase.
Here’s what you need to know about the new cards, according to CUNA’s consumer education editors:
- The new debit and credit cards work in the same manner, but now they come with an integrated microchip that helps protect your financial information at chip-enabled terminals;
- Chip cards are the new security standard worldwide;
- You'll receive an EMV card with information about how it's different, its enhanced security and how to use it. This may happen when your current card expires or your credit union might schedule a special reissue. Card issuers have discretion about whether they'll require you to use a signature when making payments or to use a PIN;
- The transaction process will be slightly different. You'll insert your EMV card in a point-of-sale terminal, wait for it to be authorized and remove it. You'll either sign a sales draft or key in your PIN to complete the transaction;
- Other countries likely will stop accepting magnetic stripe cards after a certain date. You'll need an EMV card when traveling abroad, and international travelers in the United States will have additional protection against fraud that EMV cards afford; and
- It's possible that some merchants and card issuers may choose not to convert and will continue to use magnetic stripe technology for a time. Your card still will work at the checkout and consumers will continue to be protected from fraud liability.
For related information, read “What Will EMV (Chip) Credit and Debit Cards Mean for You?” in the Home & Family Finance Resource Center.