One of the reasons that many prefer to use credit cards is due to the fact that they can be taken almost anywhere in the world. Plus, there are a number of fraud protections that come with credit cards. From earning rewards, to peace of mind, credit cards can offer a great way to pay when you go abroad.
That, however, might be changing with regard to Europe. In order to boost the security of cards, the introduction of chip cards has begun. This means that Americans, with their less secure cards, are having a bit of trouble at some locations.
Chip Cards vs. Magnetic Strip
In America, most of our credit cards still have the information stored in a magnetic strip of the card. One of the biggest security issues with this method is that the data stored in the magnetic strip is not, in fact, encrypted. Let that sink for a bit. This makes it relatively easily for thieves to copy the information on the magnetic strip.
Instead, there are newer “smart cards” being introduced. These cards, named for Europay MasterCard Visa, are called EMV cards. They feature computer chips stored inside the cards. The data on these computer chips is encrypted.
On top of that, there are transaction identifiers. These are unique “tags” that can change from transaction to transaction. So, if some does intercept some of the data, the identifier used probably won’t be good for more than a transaction or two. There are multiple levels of security with these EMV smart cards, from the identifier to the encrypted data on the computer chip.
At locations where the point of sale terminals have been switched out to accept chip cards and not magnetic swipe cards, it can be difficult for Americans to use their credit cards. If you are abroad and happen to be at these locations, then you are out of luck.
What Can You Do?
The good news is that some banks in the United States do offer EMV cards. You can ask your credit card issuer if they have these smart cards. Chase, Wells Fargo, and U.S. Bancorp are among those that offer EMV cards. You can also check with your credit union to see if it issues “smart cards.” In some cases, you might be able to get a card that will be compatible with the new systems rolling out in Europe, and in other countries.
In reality, these smart cards are somewhat comforting. They make it harder for thieves to steal your credit card information, and they can provide you with increased peace of mind. Yes, it’s nice that you don’t have fraud liability when someone steals your credit card information and uses it. But wouldn’t it be even nicer if it was difficult for the unscrupulous to steal your information in the first place?
Before you leave the country, be aware of some of the differences associated with money abroad. From the type of credit card used, to the number of digits required for PIN at the ATM, there are differences that can be very inconvenient if you don’t prepare for them.
Have you seen these newer “smart cards”? What do you think?