Are Chip-Enabled Credit and Debit Cards Really Any Better?

Pickpocketing at the subway station

New chip-enabled credit cards are upon us, but not all cardholders are jumping on the bandwagon right away. In fact, only about one in five consumers has used an EMV credit card so far, according to a survey from point-of-sale company HarborTouch.

One in five adults also names transaction time as a top concern when it comes to these cards. A full 67% of consumers believe traditional swipe cards are quicker, according to the data. “On average, it takes between seven to 10 seconds to pay using a chip card versus two to three seconds to pay using a traditional swipe card,” Jared Isaacman, founder and CEO of HarborTouch, said in the release. “While seemingly small, during busy times like the holidays, these increased processing times could add up quickly.”

“But chip cards aren’t about speed,” we can hear you saying. They’re meant to address security concerns, right? The truth is cardholders aren’t buying it — almost four times as many survey respondents are more worried about speedy processing over chip card security, according to HarborTouch’s findings.

Plus, the way the U.S. is approaching chip cards might not actually be as secure as you’d think. In the United States, banks have overwhelmingly adopted chip-and-signature cards, which require only a signature to make a purchase. The more secure chip-and-PIN format — more common overseas — requires a PIN at each transaction, foiling most card counterfeiters and thieves.

Chip cards also do nothing to thwart online fraud, even though 77% of credit and debit card owners who have received a chip card believe it will, according to a survey from CA Technologies. In fact, since chip cards’ security features mainly address in-person purchases, many experts believe there may be an uptick in online thievery.

Just ask Jennifer Watts, whose updated chip-enabled debit card was hacked almost immediately. “I had this brand new card with this new chip on it that they told me would keep me safe from fraud and hackers, and criminals still stole the card numbers,” says Watts, 48, who lives in Myrtle Beach, SC. “There was fishy activity on it somewhere in Colorado.”

This was after she’d gotten a chip card because she had a hard time checking into a hotel in North Carolina on a recent trip. “There was no way they would book me into the hotel without me having a card with a chip on it,” she says. “I was stranded.”

Watts was able to get her money back from her bank after she reported the fraud, but she’s not sold on EMV cards in general. “Even though they tell you that it’s going to keep from having money stolen out of your account, it’s just not true,” she says. “Ultimately this chip has caused me nothing but problems.”

MagnifyMoney’s Action Plan

The chip card doesn’t make you any more likely to experience fraud, but there are some habits you can use to minimize your risk of getting hit by thieves.

  • Stop using your debit card unless you’re using an ATM in a physical bank branch: Debit card fraud means the thieves are actually taking money out of your account instead of making credit card charges. You could also be on the hook for some (or all) of the stolen money with debit card fraud. Credit cards provide much better liability protection. Learn more here.
  • Cover your hand when typing in a debit card PIN: Hackers are getting incredibly clever. So clever, that some will place a skimmer on an ATM and a camera to record your pin number. Outsmart them by simply covering your hand when you type in your pin, which will make it harder for them to gain access to your bank account.
  • Be proactive about identity theft: Don’t wait around if you think there is a possibility your identity has been compromised. Pull your credit reports to look for strange activity and then place a credit freeze. Then monitor your credit cards and bank accounts for any unfamiliar charges. Find an identity theft action plan here.

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