New Chip Credit Cards Mean a New Way to Pay

Newly chip-equipped credit cards will mean a new way to pay. Instead of swiping or sliding your card, you'll be "dipping the chip" into chip-enabled terminals at the register. This new way of paying may pop up in some major retailers the next time you are in the store.

Understanding Chip Cards

EMV chip cards have existed for years in countries around the world. EMV stands for "Europay, Mastercard, and Visa," and is a global payment standard. (American Express and Discover are taking part, too.) Now, chip cards are coming to the USA, and you may soon receive a replacement credit card with both an EMV chip and a magnetic strip.

A major benefit of the chip card is safety. When chip cards are used, a unique one-time code is generated. One-time codes are hard for thieves to duplicate to make fake credit cards. The magnetic strip, on the other hand, can easily be duplicated and then used to make fraudulent purchases.

Cards will soon be equipped with this new technology, allowing you to make safer purchases. Cards will still have the magnetic strip in case you encounter a retailer that does not yet accept the new type of payment. 

How It Works

Chip cards are inserted into the chip-enabled terminal for the duration of the transaction. It operates a lot like the debit card, by entering a PIN number, you authenticate yourself, and the transaction is complete. Initially, the USA will adopt a "chip and signature" method, where users will be required to enter the card, and then sign to complete the payment. Otherwise, credit card owners would have to remember a PIN number for each credit card.

Although these new cards will make fraud more difficult, they won't make it impossible. Credit cards will still have a number, expiration date, and three-digit security code on the back. This information can still be duplicated and used for fraud if it falls into the wrong hands. Continue to be cautious with your cards and other personal information.

Keep your eye out for this new way to pay! 

Take care,



How-To Geek. "Chip Credit Cards Are Coming to the USA:  Here's What You Need to Know." 2015.

USA Today. "With new chip cards on the way, here's what consumers need to know." August 30, 2015.