Archive for June, 2015

All About Your Newly Issued Credit/Debit Card:

You may have noticed recently that your bank, or Credit Card Company has sent you a new card with a metal rectangle on the front of it. No need to worry, your account has not been compromised; your card has just been upgraded!

The magnetic strip cards, that a majority of us use, have been around for about 50 years. This card uses the swipe-and-sign method that we are all familiar with. Unfortunately, with these cards your personal information is very vulnerable. Once your information has been stolen a new magnetic strip card can easily be made and imprinted with your information. So large credit card companies are now requiring banks to make the switch to cards with chip technology, or chip cards.

Chip cards have replaced the magnetic strip cards in most other countries. This chip technology was developed to make duplicating a card more difficult, and has been successful in reducing the amount of compromised accounts. Rather than approving your purchase with your individual card number and a signature, this chip will assign a unique code associated with each transaction you make. Someone looking to steal your credit card information will only find the unique transaction code, which cannot be used for any other purchases.

The procedure for “swiping” your card at the checkout counter will change a little bit as well. With chip cards, you will insert your card into a machine, just like at the ATM, and then sign for your purchase. This requires all merchants to upgrade their payment equipment, which will be a slow process. There is a “soft” deadline for all merchants to have the compatible equipment by October 2015, but it can be hard for some businesses to cover the cost. Currently, all chip cards still have magnetic strips, just in case the merchant does not have the proper equipment. If the option is available, you should always use the chip-and-sign method.

This switch from magnetic strip cards to chip cards is a large undertaking, both for banks and businesses. You may not experience the change immediately at the checkout counter, but be aware that this more secure payment method is on the horizon.

– Jill