CHARLOTTE, NC (WBTV) - It's been two years now since a new security device debuted that's supposed to make your credit card more secure. Is it working? Are you actually safer using a credit card with a chip?
That's what I wanted to know, so I went to the experts to find out. They say if your credit cards don't have the chip you should ask for one that does.
Take a look at your credit card. It should have a small metallic square embedded in it. That's actually a computer chip whose technology makes it almost impossible to steal your financial information.
The chip was rolled out by major credit card companies in 2015. Up until that time, credit cards used the magnetic stripe on the back to convey information. That magnetic stripe is particularly vulnerable to hackers. The chip isn't.
"Oh, it's a great idea," according to Tom Bartholomy of the Better Business Bureau of Southern Piedmont. "I mean, you look in Europe where chip technology has been in existence five or ten years, and their instances of credit card fraud where it's just the card that's being captured, is almost zero. Because that code in that chip changes every single transaction. So they can steal your credit card and they're not going to be able to use it."
I contacted VISA about its chip cards and was told counterfeit fraud in the U.S. is down as much as 58% at chip-enabled merchants this year compared to last.
So if your credit card does not have a chip, you may want to consider getting one for the enhanced security. At this point, more than 2.3 million merchant locations accept chip cards.
Gas stations do a lot of credit card transactions, but you may have noticed when you use your credit card to pay for your gas, there's no chip reader. The pumps still use the magnetic stripe to get your financial information from your card.
Why aren't gas stations using the chip readers?
They should eventually according to www.creditcards.com which monitors credit card companies. Under a special agreement with the major credit card companies, gas stations have until October of 2020 to become chip compliant or they could be held liable for card fraud by the credit card companies.
Interestingly enough, the additional security in the chip credit card could actually make another problem worse: online fraud. I talked with Matt Shulz who is a senior analyst with www.creditcards.com. He says, "What the bad guys will do instead of going for the low hanging fruit of counterfeit credit cards, online fraud becomes the new low hanging fruit. So instead of focusing on efforts of making fake physical credit cards, they'll shift their efforts to online fraud."
When will we see chip only credit cards? Schulz says, "It's going to take years and years before we start having cards issued in the states that do not have the magnetic stripe. And that's simply because it's going to take a really long time for all retailers, or even really a critical mass of retailers, to be able to accept these cards. And no bank wants to put out a credit card that can only be used in a certain amount of places. They want that card to be able to be used everywhere, thus they're going to keep that magnetic stripe on there for the foreseeable future."
Bartholomy adds, "So don't think that 'hey if somebody stole my credit card, it's no big deal.' Yea, it's still a big deal because they can still copy that based on that magnetic information that's on there."
One other note here, I also talked to Consumer Reports about protecting your financial security. As good as the chip cards are, a spokesman said there's something better: mobile wallets. He said they "provide additional, stronger security, because of their two-factor authentication, encryption of data, and common use of tokens in place of the actual account numbers."