Chip Cards: What You Need to Know


EMV cards, or chip cards, are the newest product and forward step in debit and credit card security. While they have been commonly used in other countries for several years, they are just being introduced to the American financial industry. You might have recently received a new card from your credit union or financial institution. If not, you are likely to receive one soon. With this transition, you might have a few questions: How does the chip work? Do they really make my cards and accounts safer? How do I use a chip card in store and online? We are here to answer these questions and help you prepare for this change.


How does the chip work?

Your chip card is your regular card with a metallic, thumbnail-sized square on the face of the card. It functions much the same as your old card, at least on the surface. Below the surface, EMV chip technology stores your information more securely than the traditional magnetic stripe as it supports dynamic authentication. Essentially, the chip generates a single-use code that cannot be duplicated, making it nearly impossible for your card information to be copied during in-store purchases. Because data stored on magnetic strips does not provide this level of authentication, criminals are able to easily “skim” the information from cards using inexpensive card-reading devices.

Does chip technology really make my cards and accounts safer?

Because chip technology supports dynamic authentication, they prevent more instances of fraud than cards with only magnetic strips, thus making cards and accounts more secure. Unfortunately, chip technology is not able to prevent fraud completely. For example: when you buy something online, the chip on your card isn’t present and only the card information is entered into the system. Even so, you will have added security benefits and peace of mind every time you use your chip card at a card reader.

How do I use a chip card in a store and online?

Instead of swiping your card, you will place it into a special slot on the very same card reader if it is chip-enabled. The device will instruct you to leave your card in place while it authenticates the card. Once authorized, you can remove your card and sign for the purchase if prompted. Using your chip card online will not change. Making online purchases will still require that you provide the card number, expiration date, billing address and often the security code of the card.


With every change, there is likely to be a transitional period during which you become accustomed to the new process. We hope these answers have provided clarity on EMV cards and their use but new questions might arise. If you would like more information on chip cards and chip technology, please contact MSU Federal Credit Union or your financial institution.

Tags: chip cards, Finances, msufcu, Technology


Deidre Davis

Deidre Davis is the Vice President of Marketing and Communications at MSU Federal Credit Union. MSUFCU's headquarters are at 3777 West Road East Lansing, MI 48823. Contact Deidre ad or (517) 664-7877.

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