Paying for purchases with a rewards credit card has always been convenient, but you may have noticed some substantial changes in how your card is processed over the years. For example, where we once “swiped” our credit cards in a payment terminal to make a payment, we are now asked to insert our credit card—or “dip” our card—instead. In some cases, you may even be able to “tap to pay” with your credit card, which involves holding it next to the terminal so your card information can be accurately read.
In any case, the main driving force behind these changes is technology, including the introduction of chip and PIN credit cards. This guide explains everything you need to know about chip and PIN credit cards, how they work and why you may want to begin using them.
How do chip and PIN cards work? Chip and PIN cards are named after three major credit card networks across the world—Europay, Mastercard and Visa (EMV)—and were first introduced in Europe in 1993.
Chip and PIN cards were developed as a way to reduce point-of-sale credit card number theft and skimming cybercrimes. And, as of Oct. 2015, all U.S. merchants were mandated to accept EMV cards or face potential liability for any credit card fraud originating at their establishment.
When EMV chip cards were first introduced in the U.S., the process led to confusion, frustration and, in some cases, amusement. People would struggle to insert the card correctly or forget to take it out afterward, having to deal with multiple technical malfunctions during the transaction process.
With those days behind us, shoppers and businesses alike have largely adopted the technology. This means you probably see a lot less fumbling at the registers when you pay for your purchases, and that the checkout process is likely faster than it was when EMV cards first rolled out.
But, how do chip and pin credit cards work exactly? Instead of using the magnetic stripe on the side you once used to make a purchase, chip and PIN credit cards have a small metallic chip on the front that holds your payment data. This metallic chip is designed to reduce fraud, and it does so by providing a unique code for each purchase you make. Because the security code is unique for every purchase, it’s significantly more difficult for a thief to use your card for the purpose of fraud.
What is a credit card PIN?
A credit card PIN—also known as your personal identification number—is a four-digit code you can use to verify you are the person making a purchase with your chip and PIN credit card. You can pick your own PIN when you sign up for a chip and pin credit card, and you can also change your PIN at any time.
With a unique PIN that nobody knows, your transactions should be even less susceptible to fraud. After all, it’s fairly easy to forge a signature and walk away with merchandise at a payment terminal, yet hackers and thieves will have a difficult time guessing a four-digit code.
Can I get a PIN for my credit card?
You should also be aware that some credit cards with chip technology are considered “chip and signature” cards. This type of credit card comes with the added fraud protection of chip technology, yet you’ll be asked to provide a signature instead of a PIN when you use your card for purchases.
With this being said, some credit card issuers (including Barclays and Bank of America) have PIN capacity, meaning you can add a PIN to your card for an added layer of protection. This means you could add a PIN to your Bank of America® Travel Rewards credit card or the AAdvantage® Aviator® Red World Elite Mastercard®, if you prefer.
If you want to add a PIN to your credit card, you can simply call your card issuer to inquire.
Are chip and PIN credit cards safe?
Chip and PIN credit cards are significantly safer to use than their outdated magnetic stripe counterparts. This is due to the unique, encrypted code that is generated each time you initiate a transaction. This code allows your actual credit card number to remain concealed and makes any data derived from thieves during a transaction absolutely useless.
However, consumers should keep in mind that credit card transactions are already “safe” in terms of their liability. The Fair Credit Billing Act (FCBA) sets a limit of $50 in total liability for fraudulent credit card transactions made with your card, and liability is set at $0 for fraudulent transactions made with your card number. On top of that, the majority of credit cards have zero fraud liability policies that ensure you won’t pay a dime for purchases you didn’t make.
If someone uses your credit card or card number for fraudulent purchases, all you have to do is call your card issuer and report the fraud. From there, the fraudulent transactions are wiped from your account, and your issuer will take over the investigation from there. Additionally, you’ll be sent a new physical credit card, as well as a new account number to use.
Best credit cards with chip and PIN security for 2021
If you like the idea of having the best credit card security features out there, it’s smart to take a closer look at credit cards that have chip and PIN technology. Here are Bankrate’s top chip and PIN credit cards for 2021:
Chase Freedom Unlimited®: Best overall
If you’re looking for a no-annual-fee chip and pin credit card, the Chase Freedom Unlimited® is hard to beat. This Chase credit card starts you out with a $200 cash bonus when you spend $500 on your new card within three months of account opening. You can also earn 5 percent cash back on travel purchased through Chase Ultimate Rewards, 3 percent cash back on dining, 3 percent cash back on drugstore purchases and 1.5 percent back on all purchases. If you frequently utilize rideshare services, you’ll be pleased to know you also get 5 percent cash back on Lyft purchases through March 2022.
As an added bonus, you can qualify for an introductory 0 percent APR on purchases for 15 months, followed by a variable APR of 14.99 percent to 23.74 percent.
Blue Cash Everyday® Card from American Express: Best for groceries
The Blue Cash Everyday® Card from American Express is another no-annual-fee chip and pin credit card that lets you earn cash back on grocery purchases and other bills. This cash back credit card comes with a welcome bonus of 20% back on Amazon.com purchases on the card in the first 6 months of card membership, up to $150 back. Plus, earn $100 back after you spend $2,000 in purchases on your new card within the first 6 months of card membership. You will receive cash back in the form of statement credits.
You can also earn 3 percent cash back on up to $6,000 spent at U.S. supermarkets each year (then 1 percent back), 2 percent back at U.S. gas stations and select U.S. department stores and 1 percent back on all other purchases. Just keep in mind that cash back earned with this card can be redeemed for statement credits to your account.
Bank of America® Premium Rewards® credit card: Best for travel
The Bank of America® Premium Rewards® credit card charges a $95 annual fee, yet the rewards and perks you receive can make it a good investment. You can start off earning 50,000 online bonus points ($500 value) when you spend $3,000 on your card within the first 90 days of account opening. You’ll also earn 2X points per $1 spent on travel and dining and 1.5X points per $1 spent on all other purchases. Additional benefits you can enjoy with this travel credit card include up to a $100 airline incidental credit each year, up to $100 in Global Entry or TSA Precheck credits every four years and no foreign transaction fees.
Chip and PIN technology may be fairly new in the world of credit cards, but it is definitely here to stay. However, you should take the time to compare the top chip and pin and chip and signature credit cards on the market today since their benefits can vary. With some research, you can wind up with a credit card that has the best security features and the rewards and perks you want the most.
All information about the AAdvantage® Aviator® Red World Elite Mastercard® has been collected independently by Bankrate and has not been reviewed or approved by the issuer.