Major issuers are finally rolling out credit and debit cards with microchips (a system known as EMV); 400 million are in circulation, according to Randy Vanderhoof, director of the EMV Migration Forum. Chip cards have been highly touted as more secure than magnetic-stripe cards because data transfer between a chip card and an EMV-ready terminal is unique each time, making it far more difficult to counterfeit cards. But EMV deters fraud only in face-to-face sales. Criminals can still use stolen card numbers to make unauthorized purchases on the Web or over the phone.
For added protection when you shop online, ask whether your card issuer offers the option of an account number that changes with every transaction (Bank of America’s ShopSafe and Citibank’s Virtual Account Numbers are two such programs). With eligible cards from MasterCard, you can sign up for SecureCode; you’ll receive a PIN to enter each time you check out at participating merchants. Similarly, Visa cardholders can register with Verified by Visa to receive a password for online purchases. Or you can make payments online through an intermediary, such as PayPal, so your card number isn’t directly involved, says Andrew Luca, of professional-services firm PwC.
Unlike overseas, most chip-card issuers in the U.S. require only a signature at the register rather than a PIN. So determined crooks may get away with using a stolen chip card at a brick-and-mortar store if the cashier fails to ask for ID. Bottom line: Continue to monitor your credit card and bank statements for suspicious charges, and have the issuer notify you if it detects any unusually large transactions or a low bank account balance.
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