New Credit Card with Security Feature

I received my new Visa in the mail the other day, with a bonus security feature – it's now a chip-enabled credit card. What is that? At chip-enabled credit card terminals, I have to enter a PIN in order to complete my transaction. I received the PIN a few days later in the mail.

What exactly is a chip card?

"Chip cards contain an embedded microchip to encrypt information, making it more difficult for unauthorized users to copy or access data from the card ..."

At the front of the card there is a chip that looks like a thin piece of foil. An added benefit of this chip is that many cards are moving to a "contactless" payment system. Below a pre-determined point (sometimes $25) all you'll have to do is wave your card to complete a purchase.

I noticed that at Starbucks they actually don't require a signature anymore for my coffee purchases. They simply swipe the card and the transaction is done. Kind of scary if a thief gets a hold of my card – Starbucks look out!

It's good to know that I have this extra level of security now. I really like the fact that credit card companies are trying to keep on top of the burgeoning credit card fraud industry. I have to admit, though, I haven't seen too many of these chip terminals around yet, but they will be here soon, I'm sure.

What other security features are available or on the way?

I know right now when I make unusual transactions – like my trip to New Jersey back in February – I'll get a call or they will even freeze my card until I call them back. Some credit card companies even offer a photo-id card with a small picture of you embedded on the front of the card – I know my credit card company offers it but I haven't taken advantage of it yet.

Of course, for many transactions you have to enter your 3 or 4-digit code (CVV or Credit Verification Value) from the back of your card. For most online transactions, I find I now have to do this.

What about online security?

Having a chip-enabled or photo-id card isn't going to help you much from online fraud. Definitely the CVV number is going to help you, but it might not protect you from phishing scams where you get tricked into entering your info. Some cards are even extending the PIN and password to online transactions, as well.

Now that e-Commerce has been around for a long time, and we're switching to a cashless society, thieves are getting more and more ingenious in the ways they can grab our money.

Credit card companies are going to have to keep up and continually offer new levels of security.

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