All you need to know about the transition to chip cards

All you need to know about the transition to chip cards -

Updated: August 4, 2016

If you a debit or credit card, you probably noticed that you recently received a new version of the card that includes a chip. As such, you are probably wondering what this chip is and why your cards need. To help you ease in chip technology, we have broken all you need to know.

What are the smart cards

Although this technology is not new - Europe has been using it for nearly two decades - the United States finally make the switch from the magnetic stripe to chip cards (also known as EMV or chip cards). Why move now, after all these years, you ask? In other words, safety. When you pay for a purchase with your magnetic stripe card, the full card number (as it appears on the card) is sent to make the payment without encryption -. Means any machine that can read a magnetic strip can pick up

Moreover, when paying with a smart card, the transaction is not only highly encrypted, but also assign a unique code which is valid after payment is received (unless you need to make a return). Therefore, the chip card numbers are much more difficult to fly using the point of sale (POS) skimmers or other tactics, such as information on the chip is constantly changing. That being the case, it also means that if your payment information is leaked in a data breach, the hacker is less likely to use your information for fraudulent transactions because the information they have is valid. It should be noted that although these smart cards can help reduce card fraud, they can not eliminate them completely.

How can I use a smart card?

The good news for consumers is that you can use this secure payment technology where you shop every day (assuming the merchant accepts smart cards). If the merchant does not have a smart card reader, you can purchase a magnetic stripe as before, because the card is also equipped with a magnetic strip. Although you can use the chip for your shopping every day, it is important to note that the actual reading of the card will be a little different from what you are accustomed.

Since the chip is located on the top left of the middle of the map, the shift you're used to will not work for EMV readers. Instead, smart cards are inserted, or "hardened" as it is commonly known, in the card reader (see picture above). While it is there, the chip and the reader to communicate to create the unique transaction code, and you will have to intervene to complete the transaction. There are two ways you complete the transaction and confirm the purchase - sign a receipt or enter a PIN. The type required for your card depends on your bank or card issuer.

Chip-and-signature: From the consumer perspective, the process of buying a chip and signature card is very similar to the way a tape is treated; POS machine reads the card and you sign a receipt or the screen on the POS machine to complete the transaction.

Chip-and-PIN: Similarly, a chip and PIN transaction is comparable to pay with a debit card; POS machine reads the card and enter a PIN to complete the transaction.

Although the process may seem a little complicated, it is quite simple and takes about the same amount of time as a tape operation would be. Until you get the hang of pay with your smart card, patience is the best practice, as if you remove the card from the reader too quickly, you will have to redo the operation.

What can I do to prepare for the switch?

If you have received a smart card from your bank or financial institution, you'll want to make sure that you activate this card and start using it as well as destroy your old card. If you do not receive a smart card from your bank or financial institution , you'll want to give them a call to inquire about it. Although the deadline for card issuers and companies to switch to chip or readers cards is October 1, some retailers and banks are delaying this switch because it can be an expensive one - especially for small companies, according to the Wall Street Journal. Banks or companies that choose not to make the change before the deadline will be financially responsible for fraudulent purchases made with outdated maps or their business. If a bank and business have made the switch to compatible smart cards and readers, the issuing bank will ensure your fraudulent purchases as it currently does.

What should I do if my bank has not updated?

While smaller banks may be a little delayed in making the switch, large financial institutions have already converted their cards for the secured option. As such, it might be in your favor to look into getting a new credit card with EMV technology to ensure that your financial information remains safe. I do not know what cards are best? We have listed the best smart credit cards here:

Best for cash back Blue Cash Card from American Express preferred

If you prefer to make money back rewards the blue Cash Card from American Express preferred (a NextAdvisor seller) is the best option for you. With this card, you will earn $ 150 return (in the form of credit instruction) after you spend $ 1,000 in purchases within the first 3 months. You will also gain 6% in US supermarkets (up to $ 6,000 / year in purchasing and it is 1%), 3% in US stations and select US department stores and 1% on all other purchases. American Express is also running a special offer that earns you 5% cash back on up to $ 4,000 in eligible travel purchases made during the first 6 months of membership card - that is up to $ 200 cash back! As if these rewards are not enough, Blue Cash Preferred will also give you a 0% Intro APR on purchases and balance transfers for 12 months, after which applies a variable in April If the annual fee of $ 95 are not something you are willing to pay, you'll want to check out the daily cash the credit card from American Express, which offers similar rewards (including special offers 5% on travel purchases) annual toll.

Best for balance transfers: Chase Slate

While a balance transfer credit card can not appeal to your for its awards, or absence thereof, it is one of the easiest ways for you to make the move from magnetic stripe card in a smart card, as you can transfer the balance from your old card to the new one. Chase Slate makes the process of transfer even easier balance by providing not only a 15 months 0% Intro APR on balance transfers and purchases (TAC standard applies), but also by offering a fresh balance intro $ 0 transfer for transfers made within the first 60 days. In addition, this card has no annual fee and no APR penalty for late payments. Unlike other cards in this list, Chase Slate will also require "good" credit approval, which also makes the top option for someone with less-than-perfect credit.

Best to travel: Arrival Barclaycard more World Elite MasterCard

With generous travel rewards and chip technology and PIN, you can not really go wrong with Barclaycard arrive more World Elite MasterCard. For starters, this card gives you 40,000 bonus miles - worth $ 400 in travel - when you spend $ 3,000 on purchases within the first 90 days. Taking pride of place in our Travel Rewards Credit Cards Analysis, arrival Barclaycard more World Elite MasterCard earns 2 courses miles per dollar spent on all purchases and an additional 5% of miles back to use on your next purchase from each time you exchange earned miles for travel instruction credits. Although the card has an annual fee of $ 89 is waived for the first year.

Best for Business: Ink Cash Business Card

A business credit card is a must for small business owners, and the business card of ink cash is the first option. For starters, this card gives you a bonus $ 200 cash back when you spend $ 3,000 on purchases within the first 3 months of account opening. In addition, you will gain a series of cash bonuses from 5% cash back on the first $ 25,000 spent in purchasing handsets at office supply stores and on cellular phone, fixed telephone, Internet and television cable; 2% cash back on the first $ 25,000 spent on combined purchases at gas stations and restaurants and unlimited 1% cash back on all other card purchases. To sweeten the deal, Ink Cash Business Card offers 12 months 0% Intro APR on purchases and balance transfers and no annual fee. Visit our guide for business credit cards to learn more about the top options.

Best for Students: discover for students

If you are a student looking for a smart card, find for students is your best bet. Not only this card, you earn 5% cash back in categories that change every quarter - such as gas, restaurants and Amazon.com - and 1% cash back on all other purchases, it also gives you $ 20 cash back each school year your GPA is 3.0 or higher. In addition, this card has a 0% Intro APR on purchases for 6 months (April while the standard variable applies) and no annual fee.

Want to see some of the other top credit card options smart? Read our credit card reviews to see what is the best solution for you.

Disclaimer: This content is not provided or commissioned by the credit card issuer. Opinions expressed here are author's alone, not those of the credit card issuer, and has not been reviewed, approved or otherwise endorsed by the credit card issuer. This content was accurate at the time of this post, but the terms and conditions of card can change at any time. This site may be compensated by the sending credit card affiliate program.