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When a consumer has a credit card, they want to feel safe. Part of feeling safe means that they don't want their personal information stolen and they don't want unauthorized users making purchases on their card. Credit card companies have listened. Their solution is adding a pin to the account and a chip inside the card.
There are basically two kinds of credit cards out there. The first is the magnetic stripe, where users swipe and sign. The problem with this one is anyone can swipe the card and forge a signature. The other option is the chip and pin card. This card has a chip that allows a user to basically tap their card (similar to the RFID) and then enter a pin number. The additional security is the pin number, which is much harder to forge unless you know the person very well and can guess.
Europe has been using chip and pin technology for awhile now. The biggest complaint comes from US travelers in that their card doesn't allow them to get the same great stuff that their European counterparts can. These include certain ticket stations, bike rentals and other places where the chip is required to make the purchase. Many feel that the US is behind the times because of its choice to not follow as quickly to the card conversions. There are pros and cons of this technology.
The chip is a small RFID that is invisible to the naked eye planted within the card. There are some real benefits to the card, including the ability to tap it and go. Unlike the magnetic strip, it can't be worn down, so the card can keep going without having to order a new one.
Many different machines and checkouts have made it very simple for a person to make quick purchases with these chips. They can get train tickets, bus passes, drinks and a variety of other things by simply tapping the card and entering their pin number. If a person lacks the chip and pin technology, then they can't use the machines, which means most Americans aren't able to benefit from it.
The pin works similar to that of your bank debit card. It's a numeric code that you’d enter at the register upon completing your transaction. It's unique to you, therefore virtually impossible for someone to duplicate. Once you enter the correct pin, you’ll be able to get your purchase finalized.
The problem is that the pin system only works for in-person transactions. If you make a lot of transactions online, it falls into the same system as the current magnetic stripe cards. There are other things that credit cards are doing about this part, but have nothing to do with the chip and pin.
There are plenty of perks to such a card, but there are just as many problems, which is why the US is so hesitant to bring this technology over. The chip has all of your personal information stored on it. Hackers are getting smart and can easily take all of your personal information from the checkout box in which you used the card. So while the whole purpose is safety, it opens up other problems as well.
Chip and pin technology is still relatively new. It's safer than a standard swipe and sign card, but is it the best that a credit card company can provide? Probably not. The decision to carry this kind of card comes down to what kind of shopping you do the most: in store or online. If you are doing more shopping in stores, you'll find that the chip and pin technology will most likely prevent you from credit card theft over the card you've been carrying in your wallet for years.
It all comes down to if the chip and pin is that much better than the magnetic stripe. The decision is still out, but it looks like many US based cards are going to start offering them. People who travel to Europe frequently are feeling behind the times. Plus there is the ability to have an additional safeguard on in-person transactions – something that the magnetic stripe can't do.
Credit cards are used everywhere, so safeguarding is a necessity. Chips inside of the card and pins on the accounts help to give added security on to a credit card. Cardholders are then less likely to fall victim to credit card fraud or fraudulent charges.
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