PROVIDENCE, R.I. (WPRI) — No technology can prevent all fraud, but the smart chips now being featured on credit cards are much more secure than the traditional magnetic strip.
Starting Oct. 1, swiping your credit card will be a thing of the past. The swipe is being replaced by a slide on new terminals that read the information on the chips embedded on the cards.
The new technology will better protect you from fraud, but unfortunately six out of 10 cardholders still don’t have their new cards. The delay is due to the fact that more than a billion debit and credit cards have to be replaced.
“Nobody’s quite ready for the deadline,” said Matt Schultz of CreditCards.com. “Merchants don’t have the terminals generally to accept these cards. Banks haven’t gotten enough of the cards into people’s hands, and overall there’s just a lot of confusion.”
The smart chip works by generating a unique code every time it’s used. Even if crooks get a hold of the transaction code, it’s worthless because it works only one time.
For those of you that haven’t received your new cards yet, don’t fret because you’ll still be able to use your current card.
If a retailer fails to upgrade their terminals, they will be responsible for any fraudulent transactions. Schultz said some merchants aren’t planning to upgrade their systems because they don’t think it’s worth their money, even with the risk of credit card fraud.
In the event you’re a victim of fraud, even with the new smart chips, you still follow the same procedure by calling the 800 number on the back of the card.