All credit card issuers now provide “chip cards”, ie. cards with microchip security built in. The idea behind chip cards is that the data previously held only on the magnetic strip is also held inside an embedded micro chip. Once mag-stripe cards are phased out, this will in theory prevent easy theft of the card details using portable “skimmers” which are used by criminals to quickly swipe, and steal the details of a mag-stripe card.
No more Mickey Mouse signatures
The second reason chip cards are more secure is that when using them, a PIN is entered instead of an easily-forged signature. If your card is stolen, it will be useless unless the PIN is known.
Using your chip card at retail
Most retailers across Australia use these chip cards on their existing readers at point of sale. The cards introduced to the market place now usually contain both chip and magnetic strip so you can choose whether to use a PIN number or a signature. The theory is that entering a PIN number is quicker than signing for a purchase. If this turns out to be the case, retailer queue times could be significantly reduced as they become more efficient.
However there are big changes for credit cardholders in 2014. From early next year all credit and debit cardholders will be forced to use pin only, as card scheme operator’s phase out signatures altogether.
Chips go online
When used online, chip cards offer no additional security over old mag-stripe cards. Your best bet for online purchases is to use the online password security systems offered by VISA and Mastercard. “Verified by VISA” requests a password specified by you when purchasing goods online at a store which supports the system. Mastercard SecureCode operates in much the same way, adding an additional level of security to online transactions.
Chips on offer
The major banks and also smaller institutions currently offer a broad range of chip cards, with additional cards being added all the time. From June 30, 2014 signatures will no longer be accepted so chipped cards will be the only credit or debit card on offer.
Find the most extensive range of credit cards on the Australian market using RateCity’s credit card comparison tool.