Credit Card Chip FAQ

Chip Credit Card FAQs: 7 Common Questions Answered 

By Mike Peterson
In November 17, 2015

You’ve probably heard a thing or two (or three!) about credit card chip, or “chip” cards by now.  It seems like for the past two or three months every website, magazine, and TV news show has done a story on the big transition.  And if you use credit cards, there’s a very good chance that you recently received a new chip card in the mail.

If you’re like a lot of people, though, you probably still have some questions about these cards. There’s a lot of information – and misinformation – out there, and a bit of confusion about what, exactly these cards do.  That’s why I thought I’d dedicate one of my blogs this month to answering a few questions about chip cards.

Not sure how to use your new card?  Wondering what the point of that little “chip” is, anyway?  Keep reading as I address seven common chip card FAQs.

  1. What are “chip” cards, exactly?

A “chip” card is a type of credit or debit card that contains a little security microchip.  That microchip provides an additional layer of security when you shop at retail stores equipped with chip readers.  The chip generates a unique, one-time, single-use authorization code each time you make a purchase.  This means that even if that code falls into the wrong hands, it can’t be used to make unauthorized purchases.

  1. When will I get a new chip debit or credit card?

Right now, most companies are in the process of making the switch to chip cards.  Some companies have already sent out replacement cards to their account holders; others are sending chip cards as customers’ current cards expire. Your bank or credit card company probably has information on its website about how and when they are making the switch.

  1. Is a chip card the same thing as “EMV card”?

Yes.  Chip cards and EMV cards are just two terms for exactly the same thing. Chip cards have been used in other parts of the world – including most European countries – for several years now. “EMV” is actually a European acronym that stands for “Europay, Mastercard, and Visa.”

  1. How do I use a chip card at a store?

Most updated chip card readers have slots that are located just below the PIN pad.  To pay with a chip card, you simply swipe your card first then insert your card – chip first and face up – into the slot, and leave it there until the reader tells you it’s okay to remove it.

  1. What if the store doesn’t have a chip card reader?

Most retailers have at least started the process of updating their card readers – but change takes time, and it’s likely that you’ll run into a few stores that are still making the transition.  If you don’t see a chip reader at the checkout, no worries: Your chip card still has a magnetic stripe and you can swipe it normally.

  1. How do I use a chip card to buy things online?

You don’t have to do anything special to use your chip card online.  Chip cards were mainly designed to cut down on theft and fraud related to physical point-of-sale (POS) transactions – not online shopping.

  1. Does my chip card give me 100% protection against fraud?

I’m not sure that there will ever be a way to ensure 100% fraud or theft protection – but chip cards make it much harder for potential crooks, skimmers, and scammers to hijack your credit card information.

But remember, no matter how secure a card may be, you should always keep an eye on your credit and debit card transactions, and make sure you check your credit report once a year just to be on the safe side.  You can’t be too careful.

I hope this answers some of your most pressing chip card questions.  And remember, you can always reach out to your bank or credit card lender if you have more specific questions or concerns about making the switch.  Good luck!

And if you have questions or concerns about credit cards saving, budgeting, or debt problems, you can always reach out to the Debt Guru team today for a free debt consultation.  We’ll be happy to help!

mike-peterson-250If you need debt advice or budgeting advice, you can always contact the Debt Guru team today for a free, no-obligation quote.  Our friendly, certified debt counselors will be happy to help you take steps toward a financially sound future.

Mike Peterson

Mike is the author of “Reality Millionaire: Proven Tips to Retire Rich” and he has been published in a variety of local and national publications including Entrepreneur Magazine, Deseret Morning News, LDS Living Magazine, and Physicians Money Digest. He holds a B.S. in business administration from the University of Phoenix.