Major data breaches keep piling up. So some banks are issuing cards equipped with microchips in advance of the industrywide October 2015 deadline to shift from magnetic-stripe to chip cards. Chip cards use EMV technology, which means that each transaction is encrypted and unique when used in conjunction with a terminal set up to accept EMV payments. Magnetic-stripe cards transfer static data, which is easier for criminals to hack.
By and large, U.S. customers with chip cards now seal the deal with a signature. But to take full advantage of the security that chip cards offer, they should be paired with a PIN. PIN transactions are safer because they require that a thief intercept your PIN.
The introduction of U.S. microchip cards has been touted as a boon to international travelers, who may run into problems when they try to use magnetic-stripe cards in countries that have already switched to EMV. But if you have a chip-and-signature card, you may not be able to complete a transaction at an overseas payment terminal that requires a PIN, especially an unattended ticket kiosk or tollbooth. Even if you use a debit card that comes with a PIN, it may not be compatible.
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One reason U.S. card issuers say they are offering chip-and-signature cards is to ease the transition to EMV, says Matt Schulz, senior industry analyst for CreditCards.com. And most are issuing cards with a magnetic stripe and a chip to be compatible with either type of card reader. Schulz suggests asking your card issuer whether it offers a chip-and-PIN version of your card. Among the cards that come with a PIN now is the Barclaycard Arrival Plus World Elite MasterCard -- our pick for the best travel credit card.
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