Lately, I’ve noticed that there’s been a race by my credit card issuers to send me new ones to replace my old ones. It’s not because I’m wearing them out. It’s because there’s a change in credit cards you should know about that’s happening right now.
Credit card processing got a facelift thanks to new technology and a change in the law. New technology used overseas is now becoming the standard in the U.S. – the addition of a small silver chip on your credit cards. This tiny chip adds a code to the information on the magnetic strip when you use it to buy something so the magnetic strip on its own isn’t enough to be useful to a credit card thief.
Starting on the first of this month, merchants that have “old technology” can be held liable for taking a fraudulent card without using a card reader with the new technology so you’re also probably seeing new card readers at the stores you use as they are spending big bucks racing to replace their old ones. The new readers even work differently. You’ll “dip” your card halfway into the reader and it reads the chip and strip – a change from the old “swipe” through a slot.
Big retailers like Target TGT +0.00%, Kroger KR +0.00%, and Best Buy BBY +0.00% have raced to get the new readers in place, but a recent survey showed only 31% of small business owners having credit card processing systems in place that can accept chip-enabled cards. So far, about 120 million Americans have received a new card that uses this chip technology, and that number is expected to climb to 600 million by the end of the year. If you have an old card or your retailer has an old card reader, don’t panic. Both still work. But don’t get lulled into relaxing your credit oversight. This change might help cut fraud on face-to-face card transactions, but card thieves still have plenty of ways to rip you off.
Online sales are bigger and bigger parts of buying every year, and it’s important to safeguard your card information wherever it’s stored online. Making credit card purchases from an unsecured wi-fi hotspot is asking for trouble and an easy way for a hacker in the room with you to snag your card information. Crooks can even use a wand to lift your card information as you walk by, so RFID blocking sleeves or wrapping your cards in aluminum foil can help combat that, along with knowing where your cards are at all times.
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