How to pay the new way: Doing a transaction with an EMV chip card

If the little metal chip on the new credit or debit card from your bank hasn’t clued you in, here’s a heads up: The United States is moving toward EMV technology (already the norm in other parts of the world), and it will change the way transactions are conducted. Thanks to incentives put in place by the card networks (Visa, Mastercard, etc.), the changes should accelerate starting October 2015.EMV terminal image with card

You can read more about the reasons behind the switch (and the security advantages of EMV) here. For now, here’s what this all means for you in the check-out line.

You will dip your card instead of swipe

You may have already noticed that newer terminals have a small slot in the bottom front. This is where cards will go under the new system. Stephanie Ericksen, vice president of risk products for Visa breaks the transaction down into three steps:

  1. Insert your card into the slot, chip side up.
  2. Keep your card in the terminal until the transaction is complete. Depending on the terminal, Ericksen says, you’ll see a message displayed that says something to the effect of “approved.”
  3. Remove your card. When Canada implemented EMV in 2004, there were anecdotes of consumers leaving their cards behind.

    “But a lot of the terminals now have much clearer messaging and they’ll say ‘Remove your card,’ Ericksen says. “Or they blink or beep.”

Simple, right? While the transactions themselves will be simple, there’s one complication. And that is …

The switch won’t be instantaneous

It will take time for merchants to implement the new technology. In addition to upgrading their equipment, they have to upgrade their software to make the EMV slot functional. The result? For a while (a few years, probably) you’ll encounter terminals with EMV slots that aren’t turned on.

So how do you know whether to swipe or dip?

Nobody wants to be the person holding up the line.

“When in doubt, go ahead and swipe,” Ericksen says.

If the card reader is capable of doing a chip transaction, it will prompt you to insert your card instead.

So what if you accidentally dip your card into a chip slot that hasn’t been activated? In that case, don’t expect the machine to correct you.

“It might not tell you to swipe instead because that slot might be ‘dumb,’ if you will,” Ericksen says. “It might not even know there’s a card in there.”

If nothing happens, don’t assume your chip is malfunctioning. Just swipe.

Some terminals might make things easier by making it obvious that they can read the chip.Visa chip card merchant decal

“Depending on the sophistication of the terminal, they may have light indicators that light up around the chip slot,” Ericksen says.

Cashiers will likely be helpful guides as well during the transition. And Visa has free signage available online that merchants can display at the register (see the image to the right).

“In many cases, the cashiers we’ve been doing demo transactions with are very aware,” Ericksen says.

If you’re at an unmanned card-reader (ATMs and fuel pumps will be migrating to EMV eventually as well), there may be some other cues to help you along – and make sure you keep your card inside the machine until the transaction is complete, a requirement for an EMV transaction.

The new ATMs, for example, may be motorized so they draw your card in all the way, Ericksen says. Upgraded automatic fuel dispensers may beep if you take your card out too soon or have a mechanism that clamps down on your card after you insert it.

“There will be a sensory difference if that’s the way the terminal works,” Ericksen says. “And I think consumers will learn over time”

While there might be some confusion at checkout lines in the coming months, there’s nothing complicated about EMV.

“The few [EMV] transactions I’ve done so far, it’s been consistent,” Ericksen says. “Insert your card. Don’t remove your card. Wait for approval. Remove your card. There have been some minor variations, but it’s been pretty clear.”

For more information on EMV and demo videos, visit

Can you change your credit card’s due date?

Some bills (like your rent) can’t usually be shuffled around, but luckily, your credit card due date generally can be. Here’s how to change it — and why you might want to.

Changing your card’s due date is simple

Changing a due date is generally an easy favor for banks to grant.

“If the date isn’t working for you, call and in most cases they’ll accommodate you,” says Beverly Harzog, credit expert and author of The Debt Escape Plan. credit card minimum amount due

Some issuers allow you to change your payment date online – and some offer the option of choosing a due date up front when you’re approved for the card. If yours doesn’t offer either option, just call the number on the back of your card and ask.

There may be some limitations, though, including how often you’re allowed to change the due date. Bank of America allows due-date changes twice within a 12-month period, says spokeswoman Betty Riess. The change also won’t go into effect immediately – American Express (a CreditCardForum advertising partner) won’t apply the new date until the following billing cycle, says spokeswoman Elizabeth Crosta. Bank of America may take up to two cycles, Riess says. So make sure you ask your issuer about the timing and how it could affect interest on any pre-existing balances.

One more important rule: Your account generally must be in good standing (in other words, not delinquent) before your issuer will allow you to switch your due date.

Why change your due date?

The date your issuer assigns you may be inconvenient for you if:

  • It doesn’t go with your cash flow: If you don’t have a bunch of extra money lying around, you cash flow governs when you can pay bills. Having your mortgage payment, car payment and card bill due at the beginning of the month could be a problem – but bumping your card’s due date to later in the month can give you breathing room, especially if you schedule it a few days after the month’s second paycheck usually hits your account.

    “Think of all the money you have to spend during the month and what time of the month you have to spend it,” Harzog says. “If your situation changes, you can change the date again. People don’t realize how much autonomy they have when it comes to these things.”

  • You’re trying to manage your credit utilization: How much of your available credit you’re using has a significant effect on your credit score. The concept at play here is called “credit utilization,” and you generally want yours to stay under 30 percent – that is, you’re using up no more than 30 percent of your credit limit for each card and across all your cards. Credit utilization shouldn’t be cause for obsession if you’re just using your cards as payment tools. If you’re trying to build an excellent score before applying for a major loan, though, your credit utilization becomes a big deal.

    Yet, even if you pay off your cards in full every month, high utilization may get reported to the credit bureaus. Why? Every bank has a “reporting date” – the date it sends data about your accounts to the bureaus. If this date occurs before you pay off your card, that $3,000 purchase on a card with a $3,500 limit could still register.

    So, call your bank, ask when it reports to the bureaus and adjust your due date accordingly, Harzog recommends. For example, if your card reports on the 25th of the month, consider moving your payment date to the 15th.

    “That’s just a little strategy to keep your score as high as you can,” Harzog says.

    Of course, you could also solve the problem by making multiple smaller payments over the month. But if you know you’ll forget to do so, adjusting your due date and setting up auto pay can act as a safety net. However, Harzog warns, banks may change their reporting dates and generally don’t inform consumers. So double check your bank’s reporting date several months before you apply for an important loan.

  • You’re trying to get organized: If you do have enough cash in the bank to pay all your monthly bills at once, clustering your due dates can eliminate the mental noise of having all your bills scattered throughout the month.

    “Condensing as many things as you can into one day can be a great idea,” Harzog says.

Don’t try to manipulate your payment date for the wrong reasons

Consumers struggling with debt might see the ability to change your payment date as an escape route. After all, changing your due date from the 1st of the month to the 15th might seem like a good way to buy yourself two extra weeks in whatever payment cycle the change goes into effect.

“Never underestimate how creative the consumer can be,” Harzog says. “Some people would see that as a hack.”

Manipulating your payment date for this reason can backfire, however. For one thing, you’re avoiding the issues behind your debt problems. For another, you don’t know exactly when the change will go into effect, meaning you’ll need to carefully track your due dates and grace periods while things are in flux. Miss a step, and you’ll be hit with more interest charges or even late fees. In other words, all that juggling means changing your due date isn’t an easy fix to cash-flow problems.

“I covered this exact topic in my latest book, and it was one of the hardest sections to write” Harzog says. “There are so many factors involved.”

Samsung Pay poised to make its move

Mobile payments may be the way of the future — but Samsung Pay is willing to bet backwards compatibility will give it an edge over Apple Pay and Android Pay.Samsung Pay

Already launched in South Korea, Samsung Pay will launch in the U.S. on Sept. 28, 2015 with a technology that may make it compatible with more terminals, compared with other mobile payment platforms.

If you’re considering Samsung Pay as a proxy for your plastic, here’s what to know:

  • What it is: If you’re familiar with mobile payments, there’s not much new to see here — Samsung Pay allows you to store electronic versions of your payment cards in a virtual wallet. When you enter your card info into the wallet, the issuer sends back a series of numbers that is not your account number, aka a token. It is this token that’s securely stored on your device – and what’s transmitted to the merchant (along with a one-time-use cryptogram for verification) when you pay. In theory, this makes mobile phone payments more secure than plastic card payments because data thieves can’t make off with account numbers in hacks.
  • How it works: As with Apple Pay, Google Wallet, Android Pay and Softcard (RIP), Samsung Pay relies on near field communication (NFC) technology. NFC lets two devices communicate at close proximity via radio waves – hence the wave-and-pay nature of the transaction when you pay by phone. You can tell if a payment terminal is NFC-compatible by looking for this symbol:

    NFC symbol

    Retailers partnering with Samsung Pay may have additional Samsung-specific signage and stickers, too – but the app should work with any NFC-capable terminal, even if it has, say, Apple Pay decals.

    You don’t need to launch the app before making a payment. Instead, you’ll swipe up on your screen, choose a card and then authenticate via fingerprint.

  • How it’s different: There’s one major difference between Samsung Pay and Apple Pay et al. — its compatibility with terminals. NFC requires terminals to be configured to accept contactless NFC payments. But in Feb. 2015, Samsung made an interesting move by acquiring a company called LoopPay, which specializes in a technology that allows mobile phone payments with terminals that aren’t configured for NFC. LoopPay uses Magnetic Secure Transmission (MST), which uses electronic signals to send card data (stored in your phone) to the terminal’s old-school magnetic stripe reader. In other words, even terminals that haven’t been updated for NFC can read the cards in your Samsung Pay wallet. That makes Samsung usable at more stores than Apple Pay and Android Pay.
  • Which cards you can use with it: Samsung is compatible with American Express (a CreditCardForum advertising partner), Visa and MasterCard. However, card-issuing banks need to be on board as well for their individual cards to work with the app. As of now, Apple Pay has a head start and has both large banks and small regional issuers on board. That’s not saying Samsung won’t catch up, though.
  • Which phones it works on: The following Android devices are compatible with Samsung Pay: Galaxy S6, Galaxy S6 Edge, Galaxy S6 Edge+, Galaxy Note 5. It’s unclear if it will be supported by all carriers – Verizon has stated that it’s “evaluating” the technology.

Samsung Pay is making its debut after Apple Pay and Android Pay have already soaked up the spotlight. It also trails Apple in U.S. smartphone market share (about 30 percent, compared to Apple’s 41 percent).

However, it’s the first mobile payment platform in a while that offers unique value – compatibility with older terminals. That could give it an edge (and allow it to quickly take root in the mobile payments ecosystem) until new rules regarding EMV spur most merchants to upgrade their equipment.

What to know about Android Pay before its arrival

Although it didn’t launch early (as rumored based on leaked retailer memos), Android Pay is coming soon, giving consumers another choice when it comes to mobile payments. android-pay

Mobile payments and mobile wallet technology aren’t new – they’ve been making tech headlines since 2011. Now, however, after various fits and starts (remember Softcard and Square Wallet?), the giants Apple, Google and Samsung are duking it out. Apple Pay had a head start and has made significant strides in mainstream consumer awareness, issuer participation (more than 50 card issuers are compatible with Apple Pay) and merchant enthusiasm (Panera, Sephora, Walgreens and more back the app via signage and stickers at checkout). Even Rite Aid, which blocked the technology behind Apple Pay (NFC – the same technology behind Android Pay) is now on board. Meanwhile, CurrentC (the QR-based mobile payments technology Rite Aid and a confluence of other retail giants backed) is nowhere to be seen.

It will be interesting to see if Android Pay can take advantage of these developments — and whether it will help lift mobile payments to mass acceptance.

In the meantime, here’s what we know about Android Pay.

Wait… what happened to Google Wallet?

Google Wallet was one of the first mobile payment solutions to enter the market. It’s still available, and it appears Google isn’t going to jettison it. Instead, Google Wallet will live on as a vehicle for P2P payments while Android Pay will advance as Google’s mobile payments platform.

It’s no surprise Google wants a do-over. When it launched Google Wallet more than four years ago, mobile payments were unfamiliar. In fact, major wireless carriers blocked Google Wallet when it came out (in favor of backing Softcard, which has since been acquired by Google). Today, with bank, card network and carrier support, it’s a different playing field.

How does it work?

You’ll enter information for compatible payment cards into the app. Via a process called tokenization, the issuer will send back a code (NOT your account number) that will represent the card in your phone and be transmitted during payments. If data thieves manage to steal this information in a breach, they won’t get your account number. NFC symbol

When you’re at the checkout counter, unlock your phone, wave it over a terminal that’s enabled with near field communication (NFC) technology, select a card, and you’re done. The card will be charged just as if you’d used the physical card to pay.

If you’re shopping at a retailer that has integrated its loyalty programs into Android Pay – and have added your corresponding loyalty card to Android Pay – you’ll automatically be credited for the purchase. Depending on the program, you’ll also be able to pay for your purchase with loyalty points from within the app. Apple Pay hasn’t yet integrated retailer loyalty programs — but has announced plans to do so starting this fall.

Where can I use it?

You can use Google Wallet anywhere NFC is accepted. Look for the symbol pictured to the right. Even if you see no Android payment decals displayed, the app will work as long as the payment terminal is NFC-compatible.

Which cards can I use with Android Pay?

Debit and credit cards from MasterCard, Visa, American Express and Discover are compatible, according to Android Pay’s website. However, the bank that issued the card needs to sign on as well. Right now, the list of compatible issuers includes: Bank of America, Navy Federal Credit Union, PNC, Regions, USAA and U.S. Bank.

Which phones can I use it on?

Android Pay can be used on any Android phone equipped with NFC running KitKat (Android’s operating system) version 4.4 or above. That makes it less limited than Apple Pay, because Apple didn’t integrate NFC technology until the iPhone 6 and 6 Plus.

Will Android Pay be a success?

Apple Pay has a head start, but Android Pay’s edge comes with its integration with loyalty programs. At this point, we don’t know which brands and retailers’ programs will be fully integrated at launch, however, and Apple could catch up quickly.

A bigger threat may be Samsung Pay, which uses technology that works with older terminals that haven’t been upgraded for NFC. Samsung’s newest phones will all come preloaded with it.

Just as there’s room for a variety of smartphones to exist, however, there’s probably room for a number of mobile payment solutions – which will each try to gain the upper hand with new features as time goes on. That’s assuming, however, that consumers take to mobile payments. Right now, the first competitor all these apps have to unseat is the old-fashioned wallet.

Updated August 26, 2015

A closer look at American Express’s Serve Cash Back

American Express’s card offerings range from top-tier charge cards for prime customers, to prepaid cards (which often appeal to customers with thin or poor credit). Now it’s offering a new product that combines the appeal of prepaid with the cash-back rewards traditionally associated with credit cards: the Serve Cash Back.Amex serve cash back

However, this card is good fit only for a specific type of consumer. Our review will help you decide if it’s for you.

American Express is a CreditCardForum advertising partner.

The card

Just like the regular Serve card, the Serve Cash Back allows you to add money via cash reloads at retailers, direct deposit, mobile check deposit or a bank account. The cost of reloading depends on the method. For example, cash reloads AmEx’s retail partners is free, while using a third-party reload (widely available at many chain stores) would entail paying that third party’s fee. There are no fees for direct deposit or reloads from a bank account.

The fees

As with the whole Serve line of prepaid cards, the fee schedule on the Serve Cash Back is pretty simple. The only fees you need to worry about are:

  • $2.50 ATM fee per withdrawal at non-network ATMs. American Express charges no ATM fees within the MoneyPass ATM network.
  • Any third-party fees for retail cash reloads.
  • $5.95 monthly fee (no fee in New York, Vermont or Texas). That’s $71.40 per year.
  • 2.7 percent foreign transaction fee

This card’s fees are transparent, but note that annual fee. The regular Serve’s monthly fee is $1 ($0 if you direct-deposit at least $500 that month). That $5.95 monthly fee becomes important when it comes to analyzing the rewards value of the Serve Cash Back.

The rewards

You get 1 percent cash back on all purchases made with the card. To redeem, you’ll log in and apply your rewards balance toward future purchases.

Prepaid cards that offer rewards are rare, and ones that are this flexible are non-existent. PayPal’s prepaid card offers cash back, but only on certain purchases, and you have to opt in to offers to claim be eligible. The Serve Cash back is therefore a unique product.

However, as with all rewards cards, number crunching is advised. The biggest question is usually, “Will this card’s rewards make up for the annual fee?” To that end, we ran the numbers:

  • You will need to spend $595 a month on the card ($7,140 a year) to cancel out the annual fee.
  • You will need to spend at least $495 a month on the card ($5,940 a year) for it to come out ahead of the regular Serve card (with the $1 monthly fee).

Is this card a good choice?

The answer depends on your spending habits — and on less-quantifiable factors. In general, though, the consumers best suited for this card are those who:

  • Can spend enough money on the card: If you put enough spending on this card, you could make up for the annual fee. Say you spend $1,000 a month. You’d earn $45.90 a year in rewards after subtracting out the annual fee.
  • Want a prepaid card and have absolutely no interest in a credit card or bank account: There are plenty of no-annual-fee credit cards that offer more rewards than the Serve Cash Back does. They also offer additional perks, such as extended warranty, rental car insurance coverage and purchase protection that prepaid cards don’t.

    If you’re considering a prepaid card, though, you’ve probably got your reasons. Perhaps you have really bad credit and want the convenience of plastic without the need for a credit check. Prepaid cards also often appeal to those who can’t get — or don’t want — bank accounts or the debit cards tied to them. However, if you spend less than $495 a month (or conduct most of your transactions in cash), consider the regular Serve over the Serve Cash Back. It offers no rewards, but its lower monthly fee could cost you less in the long run.

Trying to build credit? This card won’t help

If your ultimate goal is to build good credit, you’re going to need to think beyond prepaid cards. While a Serve card can serve as a stopgap for convenience and online shopping until you qualify for a good credit card, prepaid cards don’t report to the credit bureaus and therefore won’t help your credit.

To begin bolstering your less-than-perfect credit, check out our listing of credit cards for fair credit. If you’re a student, an issuer may be willing to give you a leg up with a student credit card, even if you have no credit history.

Not a student and have less-than-fair credit? Consider getting a secured card. Your limit will be low, there may be an annual fee (and no rewards), and the perks are, shall we say, streamlined – but secured cards have been the first rung on the credit ladder for many. Check out our list of secured cards.

Updated August 24, 2015