Many of you have been receiving new credit cards in the mail recently to replace the ones in your wallet. These new cards have a handy new feature to combat fraud. On the front of the cards is small computer chip which will slowly begin to replace the old method of swiping the magnetic strip on the back of cards like we are all use to.
More secure “smart” cards have been used overseas for some time and, with a new rule going into effect here in the United States, most everyone will be utilizing this more secure technology soon. Beginning October 1st retailers, rather than credit card companies, are on the hook for fraudulent charges if they do not upgrade to payment systems utilizing smart chip technology. This has given retailers the motivation to upgrade their systems, allowing for more secure checkouts.
So how do these new cards work? While most new cards still have the magnetic strip on the back, most retailers will require customers to insert the card into a chip reader instead. The chip then creates a unique code each time the card is used, making copying the card by a hacker much more difficult. Once the card is inserted and the chip is read, you are required to provide either a PIN or signature after which the card can be removed.
After going through this new process a few times it doesn’t feel like any real inconvenience. With several data breaches at major retailers such as Target and Home Depot in the last couple of years, a more secure way to checkout is overdue. If you have gotten a new credit card lately, now is a great time to start utilizing the chip technology. Soon, you may not have a choice in the matter.