Chip Card Deadline Approaching – What It Means for You!

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Have you noticed new chip-enabled versions of your credit cards coming in the mail recently?

This is good news for folks who travel abroad!  It means most major US-issued cards now come with an EMV chip (or will very shortly).  And chip-enabled cards are far more widely accepted overseas.

I’ll explain the real reason the banks are mailing these cards with built-in chips.

And I’ll show what it means for you!

What’s the Deal?

Link:   8 FAQs About EMV Credit Cards

Link:   Do You Really Need a Chip & Signature Card in Europe?

Link:   Do Chip & Signature Cards Really Work in Europe?

Link:   Why You Need a Chip-and-PIN Credit Card to Get Gas in Iceland

After October 1, 2015, if your card is lost or stolen, the liability for fraudulent transactions made with your card will shift from the card issuer to the merchant if the merchant does not have EMV chip-reader technology.

And liability falls on the card issuer such as AMEX, Chase, Citi, etc. (subject to your card’s terms & conditions) if they haven’t updated their card with a chip, but the merchant has upgraded their systems.

So merchants and card issuers are scrambling to meet this “liability shift” deadline.  That’s why you may have noticed updated versions of your credit cards arriving in the mail recently!

From that date, fraudulent transactions made with a credit card will be the responsibility of the merchant if they haven’t upgraded their systems to accept chip-enabled cards.  Currently, it’s the responsibility of the card issuer (subject to the card’s terms & conditions).

That said, most US-issued cards have chip-and-signature technology, which means you’ll still often have to sign a credit card slip to complete the transaction.

Other countries use chip-and-PIN cards, which require you to enter a PIN (much like a debit card) to approve the transaction.  It’s even more secure.

Note:  If you notice fraudulent activity on your account, the procedure to report it is the same.  Contact your card issuer immediately by calling the number on the back of your card, and they’ll start an investigation.  You do NOT have to pursue the merchant.

1.   More Acceptance Abroad

It’s nice to see chip cards finally gaining acceptance in the US, because most other areas, including Europe, Canada, Mexico, and Asia, have been using this technology for several years!

While most overseas merchants accept cards without a chip, you may require a chip-enabled card for automated payment kiosks, train ticket & parking ticket dispensers, or vending machines.

Some of these (like gas stations I used in Iceland) will require a PIN.  There are no major US-issued rewards cards that are truly chip-and-PIN, but the Barclaycard Arrival Plus will default to chip-and-PIN if chip-and-signature isn’t available.

Read my post on chip-and-PIN cards in Iceland for instructions on how to set up your Barclaycard Arrival Plus World Elite Mastercard PIN!  (And to learn what happened when I used my Chase Sapphire Preferred!).

Note:   Chase says effective July 2015, the PIN-requirement at unattended kiosks is (usually) no longer a problem:

As of July 2015, unattended kiosks that accept Visa/MasterCard should now accept payment with or without PIN according to their new guidelines.  If a merchant/kiosk asks you for a PIN, first verify that Visa/MasterCard are accepted.  If so, you may be able to select one of the following to bypass the PIN prompt: “Cancel,” “Enter” or “Continue.”  If the card reader still will not accept your card without a PIN code, there may be staff in the area to assist you.  Otherwise, local currency may be needed in this situation.

If you’ve been overseas recently and successfully used a chip-and-signature card at an unattended kiosk, please share your experience in the comments!

2.   Better Security at Home

Chip-enabled cards are more secure than the magnetic-swipe cards we’re used to.  They’re harder to counterfeit or copy information from.  So this is a good thing!

Don’t forget to activate your new chip-enabled cards and discard your old ones!

If your card has a chip, you may be prompted to insert it at the bottom of the card reader when you make a purchase.  Leave the card inserted until the machine tells you the transaction is approved.

That said, even if a merchant has upgraded their systems to accept chip cards, you’ll still be able to swipe your card if it’s not chip-enabled.

You can read Chase’s page about new chip-enabled cards for more information.  And here are step-by-step instructions on how to use your new chip cards.

Bottom Line

October 1, 2015, is the deadline for banks and merchants to upgrade to credit card EMV chip technology.  EMV chip-enabled cards are more secure and reduce the risk of fraud.

From this date, if a merchant hasn’t upgraded their systems to accept chip-enabled cards, they’ll be liable (instead of the card issuer) for fraudulent transactions.

This is good news for cardholders, because it improves the security of credit card transactions.  And because most major credit cards will now come with a chip, they’ll be easier to use in some places overseas, like train ticket dispensers or vending machines.

Do you like your new chip-enabled cards?  And please share if you’ve recently used them overseas at unattended kiosks!