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Best EMV Chip Credit Cards
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Chances are you’ve noticed a transition in the credit card industry from simple magnetic strips to cards with embedded microchips. The cause of this shift? The technology used in the magnetic strips was developed in the 1960s, making it easy for criminals to steal credit card data. The good news: Most credit cards are transitioning to an EMV chip, which makes it much more difficult for a hacker to steal your information. US credit card issuers, though, have been slower to adopt this technology than worldwide issuers, which makes an EMV chip credit card essential for international travelers.
So, it makes sense then that the best EMV chip credit cards will also have features that travelers look for, such as the ability to earn travel rewards for your spending, and no foreign transaction fees. That being said, not all EMV cards have travel in mind. I’ve highlighted two below that offer great introductory offers and great cashback rewards as well.
What is an EMV chip credit card?
An embedded EMV credit card chip establishes two-way, encrypted communications between itself and the card reader. While this process adds to the time it takes you to make a purchase, it also makes your credit card data extremely difficult to intercept at the cash register. And, if your data should be stolen by hackers in some other way, it’s nearly impossible for them to create a duplicate card that includes a uniquely encoded microchip. By comparison, the old credit card magnetic strips are unencrypted and inexpensive, and low-tech machines can read them much like a cassette tape or a floppy disc.
I like to compare the move to EMV chip credit cards to a house that repeatedly has its front door’s lock picked until the owner replaces it with a sturdy deadbolt. What the EMV chip does is prevent the easy cloning of credit cards — this is the credit card industry securing its front door. Nevertheless, nobody in the credit card industry believes that the adoption of EMV chip cards will end credit card fraud all together. If your EMV credit card ends up in the wrong hands, it can still be used by a thief pretending to be you in a store. And, if your credit card number is stolen, a criminal could still use it to make purchases online or over the phone.
If your credit card (or its number) is stolen and fraudulent purchases are made, you are protected by the Fair Credit Billing Act, which caps your personal liability at $50. And in practice, every major card issuer has a $0 liability policy on unauthorized charges.
Best EMV Chip Credit Card for Premium Travel Rewards
If you travel extensively, then the Chase Sapphire Reserve® is for you. In fact, this new card was such an immediate hit, that Chase actually ran out of cards for a short time. Earn 5X total points on air travel and 10X total points on hotels and car rentals when you purchase travel through Chase Ultimate Rewards® immediately after the first $300 is spent on travel purchases annually. Earn 3X points on other travel and dining & 1 point per $1 spent on all other purchases. Points are earned in Chase’s Ultimate Rewards® program. Alternatively, you can transfer your rewards to loyalty programs for airline miles or hotel points.
Other benefits include a $300 annual statement credit toward travel purchases, and $100 credit toward the Global Entry application fee, and a Priority Pass Select membership, which gives you access to 900+ airport lounges. There is a $550 annual fee for this card, and no foreign transaction fee. And, if you spend $4,000 in your first three months from opening an account, you’ll earn 60K bonus points, which you can redeem for $900 toward travel.
Best EMV Chip Credit Card for Travel Statement Credits
If you prefer to earn rewards as statement credits toward travel purchases, rather than airline miles or hotel points, the Barclaycard Arrival Plus® World Elite Mastercard® could be a better choice. It comes EMV-equipped, and Barclays is one of the few major banks that issues cards that are compliant with the Chip and PIN implementation, which is commonly used at unattended kiosks found at train stations, on gas pumps, and at toll booths, making your data a bit more secure. In addition, this card offers customers double miles on all purchases, and each mile is worth one cent as statement credits toward travel purchases. You also receive 5% of your redeemed miles back. There is an $89 annual fee for this card that is waived the first year, and no foreign transaction fees.
Best EMV Chip Credit Card for Balance Transfers
If you have a balance you are trying to pay off, consider this EMV-equipped card that’s one of the only options offering interest-free financing on balance transfers, with no balance transfer fee. New cardholders receive 15 months of 0% introductory APR financing on both new purchases and balance transfers, and there is no fee for balance transfers conducted within 60 days of the account opening. After that, the fee for future transactions is 5% of the amount transferred with a minimum of $5.
The Chase Slate® credit card also offers Chase’s Blueprint program, which allows you to reduce interest charges by paying for some purchases in full while carrying a balance on others. Blueprint also offers powerful budgeting and goal-setting tools to empower you to pay off your balance sooner. There’s no annual fee for this card, but there is a 3% foreign transaction fee.
Best EMV Chip Credit Card for Cashback Rewards
When you are looking for cashback rewards, the EMV-equipped Discover it® Cash Back card is a credit card to consider. This card offers 5% cash back at different places each quarter like grocery stores, restaurants, gas stations, select rideshares and online shopping, up to the quarterly maximum when you activate. Plus, 1% unlimited cash back automatically on all other purchases. Rewards can be redeemed at any time, and for any amount as cash back or statement credits.
Why has it taken so long for the EMV system to be adopted?
The EMV smart chip technology dates back to the early 1990s when it was introduced in Europe. (EMV stands for Europay, MasterCard, and Visa — the three companies that were originally behind its creation.) Although Europe and other parts of the world embraced the new standard early on, the US credit card industry made the decision to forgo EMV smart chips and focus on other types of fraud-prevention methods for the next 20 years.
But after several high-profile data breaches that struck some major American retailers, it became clear that our credit card industry needed to move beyond magnetic strips, and quickly. On October 1, 2016, the industry underwent a so-called “liability shift,” which meant that the cost of a fraudulent transaction would fall on either the retailer or the card issuer, whichever had chosen not to use the latest EMV smart chip-enabled cards or card readers.
This soft deadline, along with the high cost of EMV chip readers and software, resulted in a very slow rollout of smart chip technology at most stores. One year after the liability shift, your chances of finding a working chip card reader at each store you visit are just one in three. And, while most new credit cards issued will include an EMV chip, few card issuers are proactively replacing existing credit cards when they expire.
How do chip cards work?
Before debunking the chip-cards-are-foolproof myth, it might be helpful to know what a chip card is and how it provides extra security. Chip cards feature EMV chips, easily visible on the cards. These chips enable a new, unique code each time you purchase something at a point-of-sale (POS) system. In other words, when you “dip,” or insert your card into a POS system, a new code is generated for that transaction, making it more difficult for fraudsters to trace the transaction to your card number.
The chip card is an improvement upon its predecessor – a magnetic stripe. When a card with a magnetic stripe is swiped at POS systems, your card’s number, instead of a unique code, is associated with the transactions. This was partly the reason why the 2013 Target breach impacted so many consumers — magnetic stripes were used to pay for purchases, which meant the malware-laced POS system collected consumers’ credit card numbers. Because of the way chip cards work, as opposed to magnetic stripes, chip cards are better at preventing some types of fraud, including card skimming (i.e., harvesting payment information from your card’s stripe through a card-reading terminal, usually by attaching a physical device to the terminal).
While the chip card’s emergence in the U.S. may have led to a 70% decrease in counterfeit dollars between December 2015 and September 2017, chip cards do not make you impervious to fraud. Keep reading to learn why this tech advancement isn’t able to completely protect you and your financial health.
Do chip cards protect you from online fraud?
As chip cards proliferate in the U.S., some claim that more fraudulent activities are being moved online. The argument is that chip cards make it more difficult to copy credit card information onto a counterfeit card (e.g., skimming payment cards to create counterfeit cards) because each transaction has a unique code. As a result, fraudsters, after noticing the growth in e-commerce and online activities, have taken to committing card-not-present and online fraud – fraud that’s carried out online, through social networks and more. The increasing number of data breaches may have also contributed to the rise in fraud. All this, according to some, has led to a surge in fraudulent activity through online means. Unfortunately, online fraud is something that chip cards can’t prevent at this time, as cardholders opt to type their credit card information into online forms to complete transactions.
Will chip cards prevent card shimming?
While EMV cards may not be affected by card skimmers, a relatively new technique akin to skimming, referred to as “shimming,” can target chip card users in a similar way. To engage in shimming, fraudsters insert a shim (i.e., a thin device that has flash storage) into the chip card reader of an ATM or POS system, sometimes by inserting a special card into a payment terminal. The shim then collects your card’s information when you dip it into the terminal. Once it’s collected, the card’s information can then be cloned onto a magnetic stripe card. The resulting product? A magnetic stripe card that can be used to make unauthorized purchases under your name, such as unauthorized buys from online stores.
Some merchants don’t have chip card readers
While there are a number of incentives for retailers to switch to chip card readers, including the October 2015 liability shift date and the doing away of card signature verification, some merchants haven’t made the switch. For example, due to challenges related to the fuel segment’s “complicated infrastructure” and “specialized technology,” Visa has delayed the chip activation date for U.S. domestic automated fuel dispensers to Oct. 1, 2020. Because not all POS systems read chip cards at this time, chip cards may not be able to protect you when you’re faced with the prospect of paying through a non-EMV-enabled payment terminal.
What can you do to better protect yourself?
It may not be possible to completely protect yourself from payment card fraud, but there’s a silver lining: there are some steps you can take to better prevent fraud and mitigate its consequences. For example, if you want to buy something online, it’s beneficial to find out if the online store’s website is secure before paying up. It’s also a good idea to select strong passwords for your accounts and to frequently monitor your balances and statements, checking to see if there are mistakes or signs of fraudulent activity. Additionally, if you are forced to use your magnetic stripe, opt to pay with a credit card over a debit card, as the former offers more fraud protection than the latter.
Now that you know more about why chip cards can’t completely prevent fraud, learn more about what you can do to protect your financial health and personal identity. To start, take a look at our identity theft protection blog.
Please Note: Information about the Discover it® Cash Back have been collected independently by TheSimpleDollar.com. The issuer did not provide the details, nor is it responsible for their accuracy.
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