The Bank of America content in this post was last updated on 03.03.2020.
By now, most shoppers have grown accustomed to the check-out line routine: After scanning your items, you look for the chip reader and insert your credit or debit card to make a payment.
When the machine is done reading the unique, encrypted information transmitted by the chip on your card, you hear a beep or buzz – reminding you to take your card and complete the transaction.
Seems simple, right? Having chips on our cards has become the new normal. But where did these chips come from? How do they work? And how secure are they? Here’s everything you need to know about chip and PIN credit cards.
The history of EMV chip and PIN cards
These Europay, Mastercard, and Visa (EMV) chip and PIN cards – named after three major credit card providers across the world, were first introduced in Europe in 1993. They were developed as a way to reduce point-of-sale credit card number theft and skimming cybercrimes. In October 2015, all U.S. merchants were mandated to accept EMV cards or they could be liable for credit card fraud originating at their establishment.
When EMV chip cards were first introduced in the United States, the process led to confusion, frustration and in some cases, amusement. People would struggle to insert the card correctly, would forget to take it out afterwards and would have to deal with multiple technical malfunctions during the transaction process.
With those days behind us, shoppers and businesses, alike, have largely adopted the technology. National Retail Federation statistics say EMV chip readers were in use in 99% of all large and mid-size businesses, and 81% of small businesses as of the end of 2017.
By the end of 2018, 3.1 million U.S. merchants had adopted the technology, according to Visa, and 98% of U.S. payment volume in December 2018 was via chip cards.
How chip and PIN cards work
EMV chip cards, are considered “smart” credit cards. Each time you initiate a chip transaction, the card generates a unique, encrypted code that only works once. Even if a thief could steal that data, it would be useless, as your actual credit card number remains concealed.
In contrast, magnetic stripe cards transmit the same data for each transaction. Credit card skimmers can be illegally installed on POS machines – most frequently at gas stations – to steal credit card data. A newer type of credit card theft called shimming can also steal the data from your card’s magnetic stripe. Cybercriminals can also hack into retail store data to steal your credit card number. With pin and chip cards, that data is never stored, since it’s different for every transaction.
The security of chip and PIN credit cards
In-store credit card theft has dropped dramatically since the introduction of chip and pin cards. Merchants who completed the chip upgrade experienced 80% less counterfeit fraud in September 2018 compared to September 2015, says the Visa study.
EMV cards are also, apparently, a powerful deterrent, as counterfeit card crime dropped by 48%, overall.
Despite that, retailers are expected to lose $130 billion in card-not-present (CNP) fraud – digital transactions completed through the internet – between 2018 and 2023, according to an analysis by Juniper Research.
This isn’t entirely the fault of chip and pin cards, of course. People shop online because it is easy, convenient and often less expensive – sometimes putting their data at risk in the process.
Chip cards do improve security for in-person transactions. However, when you’re using your EMV card online, you must do your best to protect your financial data. This includes not making purchases on unsecured wireless connections and choosing effective, unique passwords for each account.
Transactions with chip and PIN credit cards
When you complete a transaction with your chip and pin debit card, sometimes you have to give your signature, and other times, you’ll be asked to enter a four-digit PIN. You can typically override the PIN request by asking the cashier to process the transaction as “credit.”
The money will still be debited from your bank account, but the merchant might pay less in interchange fees – fees the credit card issuers charge permitting a merchant to accept credit cards.
On the other hand, check with your bank, because some will charge their customers a fee for using a debit card for point-of-sale transactions. However, this won’t happen if you process the transaction as credit.
Big box retailers like Walmart and Home Depot assert that PIN transactions are more secure than credit transactions requiring a signature. Signatures can be easily forged, and most sales clerks don’t verify signatures.
With a chip and PIN transaction, even if someone else manages to get ahold of your card, they can’t complete a transaction without the PIN. While most common on debit cards, some credit cards offer the capability to add a PIN.
In Europe, many merchants require chip and PIN transactions for added security. So if you’re traveling, it’s important to explore your options for a credit card with no foreign transaction fees as well as chip and PIN technology. Although there may be ways around using a PIN, it really is the most secure way to process any transaction in the U.S. or overseas.
Best credit cards with chip and PIN security
Most credit cards today use EMV chip technology for more secure point-of-sale transactions. But for added security and foreign travel, you’ll want to find one that also enables PIN use. Here are some of the best options:
|Chip and PIN Credit Cards||APR||Annual Fee||Rewards|
|Bank of America® Travel Rewards credit card||16.49% – 24.49% (variable)||$0||1.5X points on everything|
|Barclaycard Arrival Plus World Elite Mastercard (no longer available)||18.24%, 22.24% or 25.24% (variable)||$89 (waived the first year)||2X miles on every purchase|
|JetBlue® Plus Card||18.24%, 22.24% or 27.24% (variable)||$99||6X points JetBlue, 2X in restaurants and grocery stores, 1X other purchases|
Bank of America® Travel Rewards credit card
With no annual fee, no foreign transaction fees, and chip and PIN capability, the Bank of America® Travel Rewards credit card has a straightforward points system perfect for those new to using rewards cards.
Earn 1.5 points for every dollar you spend in any category. You’ll earn 25,000 bonus points with at least $1,000 in purchases in the first 90 days of opening the account, which equals a $250 statement credit.
Bank of America customers can also get up to 75% more cash from your rewards with a minimum balance of $100,000 in a Bank of America account.
Barclaycard Arrival Plus World Elite Mastercard is no longer available through our site.
The Barclaycard Arrival Plus World Elite Mastercard provides a straightforward rewards structure where you earn 2X miles for every purchase.
You’ll enjoy a 0% intro APR for 12 billing cycles on balance transfers made within the first 45 days of sign-up (then 18.24% – 25.24% variable). You’ll also earn 70,000 bonus miles after you spend $5,000 on purchases within the first 90 days.
On top of that, you earn 5% miles back each time you redeem miles, making this a card that keeps giving.
JetBlue® Plus Card
For those with excellent credit, the JetBlue® Plus Card is an exceptional chip and pin card that rewards JetBlue flyers with 6X bonus points for every dollar spent with the airline. You’ll also earn 2X rewards at restaurants and grocery stores, and 1 point for every dollar on other purchases. With rewards like these, you’ll quickly earn back the $99 annual fee.
With no foreign transaction fees, a $100 statement credit annually if you book a JetBlue vacation package with your card, and a 0% intro APR for 12 billing cycles on balance transfers made within the first 45 days (then 18.24% – 27.24% variable), this flexible card delivers ongoing value with chip and PIN security.
As credit card security evolves, it’s important to look for cards that provide not just the best rewards, but the latest security technology to protect your data and manage your finances.