Credit Cards Blog

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Paper or plastic? PC or Mac? Chip and PIN or stripe and signature?

Huh?

That last item is a reference to a new credit card technology that has taken Europe by storm, but still lags in the United States.

The "chip" part of the new technology refers to a microchip that's embedded into the credit card to help secure the account information. The "PIN" part refers to a personal identification number that the cardholder enters into the card processing system to authorize the payment. One thing that's neat about chip and PIN is that it doesn't require a signature.

So far, only one major credit card issuer, Chase Card Services, has announced plans to introduce the newer technology in the U.S., albeit initially only for certain customers.

Chase last week said it will offer a "chip-and-signature" credit card to a select group of current cardholders who travel frequently outside the U.S. and thus, are more likely to run into problems without the newer technology. These customers will receive the new credit card in June, the company said in a statement.

The Chase chip-and-signature cards will include an embedded microchip and a magnetic strip, so the cards should function in the U.S. and abroad.

Chip technology is in use in more than 130 countries, according to a Chase statement.

Credit cards that still use only the older technology have been particularly problematic at unmanned kiosks, ticket counters and gas pumps overseas, according to news reports.

A recent Bankrate story, "Will your credit card work abroad?" offers some tips for U.S. travelers whose credit cards use only the magnetic stripe technology. Here's a recap:

• Tell payment-takers the card needs to be swiped and a signature is required.
• Purchase tickets ahead of time or online whenever possible.
• Carry extra cash, just in case a merchant doesn't accept magnetic stripe cards.
• Don't try to use an ATM PIN to authorize a credit card payment. It won't work.

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