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What You Need to Know About EMV Chip Credit Cards

Find out how technology is changing credit cards, what it means for shoppers, and whether the updates will really keep us safe from fraud.

By
Laura Adams, MBA
5-minute read
Episode #410

What Chip Cards Mean for Consumers

How do these changes affect consumers? As I mentioned, you’ll be receiving new credit cards in the mail and you’ll see new types of terminals in stores. Large retailers will be the first to adopt them and smaller merchants will get on board over the next few years.

Most of the new credit cards will incorporate multiple technologies: a traditional magnetic stripe, a contact EMV chip, and a contactless NFC chip. Here’s how they work:

  • Magnetic stripes will continue to work the way they always have, when a merchant hasn’t upgraded to a chip-enabled terminal.  
  • EMV Chip technology will require you to insert your card, chip-side up into the terminal and follow on-screen prompts. The chip adds a unique, one-time code that gives you extra protection.   
  • NFC Chip technology is near-field communication, which allows you to wave your card close to a terminal reader without having to make contact with it. This is the magic behind products like Apple Pay and Google Wallet. The EMV chip will still create a unique code giving you extra security at checkout.

To complete your transaction, you’ll typically have to sign. Eventually, we’ll catch up with other countries that use “chip and PIN” card technology, which is safer. It requires a personal identification number, just like you must enter today for debit card purchases.

See also: 6 Risky Situations When You Should Avoid Using a Debit Card

How Chip Cards Affect Online Purchases

Unfortunately, using an EMV chip card doesn’t make online fraud go away. In fact, it could get worse as criminals are shut out of common counterfeit scams like skimming and cloning physical cards to make purchases.

Having a more secure in-store shopping experience is great—but what about using chip cards for online purchases?

Unfortunately, using an EMV chip card doesn’t make online fraud go away. In fact, it could get worse as criminals are shut out of common counterfeit scams like skimming and cloning physical cards to make purchases.

So, you still need to monitor your financial accounts on a consistent basis to spot and report fraudulent activity right away. Also keep an eye on your credit accounts using free services like:

The new EMV cards won’t eliminate fraud completely, but they offer new layers of security that are much safer than the magnetic-stripe cards we’ve been using.

Another benefit is that you’ll be able to use your chip cards more widely when traveling overseas because international merchants prefer them.

If you're ready for help managing debt, building credit, and reaching big financial goals, check out Laura's private Facebook Group, Dominate Your Debt! Request an invitation to join this growing community of like-minded people who want to take their financial lives to the next level.

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About the Author

Laura Adams, MBA

Laura Adams received an MBA from the University of Florida. She's an award-winning personal finance author, speaker, and consumer advocate who is a frequent, trusted source for the national media. Money-Smart Solopreneur: A Personal Finance System for Freelancers, Entrepreneurs, and Side-Hustlers is her newest title. Laura's previous book, Debt-Free Blueprint: How to Get Out of Debt and Build a Financial Life You Love, was an Amazon #1 New Release. Do you have a money question? Call the Money Girl listener line at 302-364-0308. Your question could be featured on the show.