How secure are the new chip cards?

Chip card security

CHARLOTTE, NC (WBTV) - You may have your new "chip" credit cards in your wallet, but can you use them everywhere you shop?  Experts say the computer chips in the card offer extra security by encrypting card numbers and personal information to protect it from skimmers and card counterfeiters.

However, many retailers are still asking customers to "swipe" their chip cards because they aren't ready for the full transition.

According to the Electronic Transactions Associate, or ETA, the transition to chip cards and readers is only at 50% despite a deadline that has long-passed.

"The retail industry has done it's part but the credit card industry has dropped the ball," said Craig Shearman.  He's with the National Retail Federation based in Washington, DC.  The NRF represents retailers from brick and mortar stores and online sales operations.

The NRF says retailers aren't fully equipped and ready to use card readers, in part,  because the banks haven't provided enough personnel to perform their required certification of every card reader.

For their part the banks blame retailers, laying out their argument in a letter from the American Banking Association to members of Congress, written in May.  The ABA accuses retailers of using chip card security to divert attention from their own data breaches by warning customers chipped cred cards are only at their most secure when used in concern with a unique PIN.

The ABA offers that while chip cards cannot protect against a stolen card, they will prevent counterfeit fraud which the organization says make up the majority of credit card cases.

In the meantime, it leaves consumers wondering which argument is right and how to best protect their information.

All three of Jim Wooden's cards are chipped but he can't use them as chipped cards in many retailers he frequents.

"Some businesses don't have them.  Harris Teeter doesn't have the readers, which is a surprise because they are a big company," Wooden told us.

He appreciates the encryption of the information on the cards on the back end of a transaction, but wishes each card came with a PIN.

"On the front end there's no advantage.   The chip thing is good but it is only part of a solution that's still not in place," he said.

The ABA tells us, depending on the card issuer, you may be able to request a PIN to go with your credit card.  They also remind users that false charges to a credit card can be disputed and most times consumers are made whole by the bank.

Jim says he will rely on one of his cards which gives him instant updates each time a purchase over a certain threshold amount is made.  That gives him peace of mind.

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