Stealing personal data and money from credit and debit cards with just a magnetic strip on the back was becoming too easy for criminals. That led banks to change card technology.
You may have noticed over the past couple years your old-style cards being replaced with chip-equipped cards. But are you taking care of them properly?
Why chip-equipped cards are more secure
On traditional credit and debit cards, sensitive information is stored in the magnetic strip on the back. If someone were to access this data, they would have enough of the cardholder's information to make fraudulent purchases. All the criminal needs to do is copy the magnetic strip and replicate over and over again because the information doesn't change.
Chip-equipped cards, a.k.a. EMV cards - named after Europay, MasterCard and Visa, work differently. Every time an EMV card is used to make a purchase, the card's chip creates a unique transaction code.
This code can never be used again, making these transactions more secure. That's because if the code is stolen by a hacker, it would be denied for any future transactions.
Unfortunately, not all retail stores have updated their point-of-sale machines to accept EMV cards yet. This is why most of these cards also have the magnetic strip included on the back. This way you can still use your card at locations without the newer technology.
How to handle your EMV cards
Chips embedded in your payment cards can stop working if damaged. That's why it is important to handle them with care.
- You should never leave them in the bottom of your purse or bag where they can be scratched by keys or other items floating around in there.
- Don't expose the card to liquids that could harm the chip.
- Store your cards in a wallet, or card carrier to keep them safe.
If you do try using an EMV card to make a purchase and it doesn't work, the store's card reader could be malfunctioning. Try using it at another location to make sure the problem is with the card. If it is the card's issue, request a new one ASAP from your bank.
Eventually, all retailers will update their technology to accept EMV cards. At that point, banks can totally eliminate magnetic strips on the back for more security.
Protecting your credit and debit cards
Stolen identities and fraud on accounts are not easy to fix. Your best bet is to protect your information before it gets hijacked. A great way to keep your personal information from thieves is to use an RFID (radio frequency identification) blocking wallet or purse.