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Money Matters

Learn More about Chip Credit Cards

Whether you’ve decided to make the switch to a chip credit card or your bank has made the choice for you — these cards are quickly replacing your old swipe credit cards and raising a lot of questions. We’ve compiled a list of answers to frequently asked questions about chip cards to help you understand your new credit card.

How do you use a chip card? A chip card functions almost exactly the same for the cardholder as their old card (same protections and terms, etc). The only real change is that, instead of swiping, your card is inserted into the bottom of a card reader (this is called dipping) and then has to sit there while the data is exchanged. Credit and debit cards with chips vary so you may be required to sign or enter a PIN.

Can chip credit cards be swiped? No and yes. Your chip card is designed to be inserted and not swiped so you receive that added layer of protection. But, not all card readers are ready for chip cards yet so if there is still a magnetic strip it can be used for swiping.

What is an EMV chip? EMV stands for Europay, MasterCard and Visa and it’s a global standard for credit cards. Using EMV standard chip technology is more widely accepted abroad but it’s growing in the United States. The chips are more difficult to duplicate, which means there will be less credit card fraud at the point of purchase.

What does the chip do on a credit card? As mentioned above, the chip is more difficult to duplicate than the strip. Every time you use your chip card a unique transaction ID is created so, even if it is captured by a card reader or some other method, it is not valid for other transactions.

Is a chip card more secure? Yes, but this comes with a caveat. Chip cards are still not 100% secure so keeping track of your card and monitoring your bills is still an important step in protecting your credit.

While you’re getting used to dipping your chip card to complete a transaction, don’t get too attached — “tapping” will be the newest trend on the horizon. Contactless card reading happens by tapping your card against a terminal scanner. This type of credit card transaction is more common in other countries but, due to its speed and convenience, will probably be a big hit in the states too.

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Related Topics: Finance , Identity Theft