If it hasn’t already happened, eventually all your credit and debit cards will be upgraded to a new kind of plastic—called the chip card. If you aren’t sure what that means, or how it might help you, keep reading.
What are chip cards?
Old credit cards and debit cards had a magnetic strip that allowed machines to read and gather your data. New chip cards combine the magnetic strip with an embedded microchip. This microchip is used to further authenticate all of your transactions.
How do chip cards help?
As you activate your new cards and change all your automatic charges and online accounts to your new credit card numbers, you might be wondering what the point is. It may be an annoying process but it is worth it because these new cards make you safer. Chip cards help improve security in a couple of ways:
- The data chips in chip cards have been proven to be harder to hack than magnetic strips are. Notice that I said “harder” to hack—not impossible to hack. You still need to practice smart card storage.
- Chips make cards much harder to counterfeit. Once again, it’s not impossible to counterfeit a chip card—and some merchants might lag behind in technology and keep machines that don’t read chip cards, so you still need to keep your wallet secure.
Changes you’ll see
In addition to getting new cards, you’ll notice that the retailers around you will be updating their card readers. This is because, if they don’t, they may be on the hook for fraudulent charges on cards used at their location. Once the new cards are in use, your transactions may take as much as seven seconds longer to process as a result of the added steps required by the chip.
It’s worth noting that chip cards do not make you unhackable or completely safe from fraud and identity theft. You can still have your wallet stolen, your online accounts hacked, and be the victim of a phishing or other scams. Still, these cards do offer us a way of tightening up security and reducing the likelihood that we’ll become victims of fraud.