Did your new credit card come in yet? Some people started getting them as early as last autumn, but now most people are getting their updated credit cards and they come with the promise of better security for anyone who uses them. The cards look slightly different because there is a metallic chip in them and it requires an update to card scanners.
Rather than simply swiping the card, you insert the chip area into a slot and the payment is processed securely. So what do you do when you visit a restaurant or store that doesn’t have one of the new scanners updated for the chip? The cards do have the same black stripe, so we can swipe them just like we use to do with the old card, right?
Actually, you CAN swipe the credit card with a chip in it but you really should avoid doing it.
In order to know why you should avoid swiping the card, you should know why the banks are using them in the first place. It wasn’t all that long ago that credit cards were being stolen because of massive hacks at popular retailers, such as Target and Home Depot. The banks realized there must be a better way to process the information.
The chips offer a degree of protection by making the transaction more secure. They also offer another type of protection, because if your card information is stolen, you are not responsible for any charges that are put on it fraudulently. That is only the case, however, if the card is put into the chip reader.
If the card is swiped, the store becomes responsible for covering missing funds but most of them will not do it. In the end, you are the one who gets stuck with the bill.
Good Housekeeping had the following to say:
Banks have been rolling [new chip cards] out like crazy and they’re supposed to be safer – as long as you use them the right way, that is. That’s why the fact that some retailers – including Bed Bath & Beyond, Staples, Chick-fil-A, and Panera Bread – don’t have chip card readers up and running at all of their locations is a big concern. You see, if you swipe a chip card instead of inserting it into slot, the merchant is responsible for covering any fraudulent charges – not the bank. And some retailers aren’t in a financial position to cover major security breaches, like that corner store you picked up a gallon of milk from in a pinch. That means you get stuck covering the snafu [. . .]
Why have some stores not yet received their new readers? It could be any number of different issues. Some banks are claiming the retailers are slow to adopt new technology. The store say they’re ready but have not yet received certification to update from credit card companies.
If there is one thing that you can take away from all of this, it’s never to swipe a credit card with a chip in it. If you can’t put your card into a chip reader, use cash, a check or choose another type of payment. Just make sure you never give your banking information to anyone.