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.