Top 3 Ways PIN and Chip Credit Cards Make Shopping Safer
If you’ve ever been the victim of credit card fraud, you’ve likely wished for a more secure way to pay for purchases. Thanks to security chip technology, there’s not only a better way to make credit purchases, but it’s coming to a mailbox near you soon. If you’re not sure exactly how chip-embedded cards can protect your finances, be sure to review the top three ways PIN and chip credit cards can make shopping safer.
Harder to skim your card
The new security chip cards credit card companies are issuing differ from traditional cards in a powerful way. Rather than keeping reusable information on a magnetic strip that can be used endlessly after skimming, the chip on PIN and chip credit cards creates transaction codes that can only be used once. This means that if someone is able to steal your information while you’re paying for a cup of coffee in the morning, that information will be useless when they try to charge expensive electronics to your account later in the day.
Note: If your credit card leaves your possession at any point during the transaction, it’s still possible for a fraudster to skim your magnetic strip and use that information online.
Increased difficulty using stolen cards
While some credit companies will only provide users with signature verification to go along with their security chip, many of the larger credit companies plan to issue PIN and chip credit cards. Let’s say you leave your card sitting on the table at a restaurant and someone takes it. While they can make all the online purchases they like until you report your card stolen, they’ll have trouble using it in person. Even though the security chip will generate a valid unique transaction code for their fraudulent in-store purchase, they’ll need your PIN to authenticate their identity, which they won’t have if you use a hard to guess PIN.
Basically, PIN and chip credit cards protect you from having fraudulent charges hit your account when someone counterfeits or steals your card. That’s two layers of protection that magnetic strip cards simply can’t provide.
Less risk from retailer data breaches
Unfortunately, it seems like a new retailer is in the news every month because someone has hacked their data. While paying with PIN and chip credit cards won’t make retailer data breaches more difficult for hackers, it will lessen the impact on consumers. Under the old system, someone could hack a store you made a purchase from and use your stored card information to create counterfeit cards from your account. With security chip cards though, any credit card data a hacker receives will be worthless since the transaction codes are no longer valid for future purchases.
If you’re really serious about keeping your financial data secure, switching to PIN and chip credit cards as soon as your card issuers give you the option is the clear way to go.
Holmes, Tamara E. Data Breaches Turn Spotlight on EMV Cards. CreditCards.com. February 7, 2014.
Kossman, Sienna. 8 FAQs about EMV Credit Cards. CreditCards.com.