The past year’s rash of data breaches proved just how vulnerable old-school magnetic stripe cards can be. Could the more-secure EMV chip technology that’s become the standard internationally be the answer?
As a countermeasure to thwart fraud, EMV “smart card” technology (a joint effort of Europay, MasterCard, and Visa) was concocted in the 90’s and rolled out during the 00’s throughout the world … but not in the U.S. That’s changing, however, in light of the October 2015 EMV liability shift, which went into effect Oct. 1, 2015. Now, whichever party (merchant or issuer) hasn’t upgraded will be held responsible from card-present fraud costs.
That’s a powerful motivator to adapt. Yet, while an increasing number of cards are sporting chips, others are lagging behind.
How EMV works
EMV cards thwart some of the most common ways thieves clone cards and steal data. They come equipped with a microprocessor chip that encodes the information transferred to the merchant, such as account numbers, differently with each transaction. So, even if thieves manage to get data from a merchant (as they did in the Target breach), it’s like stealing an expired password — useless. EMV chips are also tougher to clone than magnetic stripes are.
While EMV technology won’t make data theft disappear (several successful breaches overseas are a testament to that), it does up the ante for thieves, making their job harder — when it comes to card-present fraud, that is. EMV technology doesn’t do anything about online fraud, unfortunately. So, if your card information is stored in an online shopping account or other website and that information gets compromised via a bug like Heartbleed, or a colossal hack (like the 2013 Russian cybergang hack that compromised 1.2 billion online login credentials), the little chip on your card won’t protect you. The only thing you can do is have hard-to-guess passwords and change them often.
The EMV cards being rolled out stateside are a bit different than those rolled out in other countries. Most U.S.-issued cards use what’s called “chip and signature“ technology, while the EMV cards being issued overseas generally use “chip and PIN” technology. The chip and PIN cards require the cardholder to type in a PIN to complete a transaction, making it difficult for a thief who gets ahold of the card to use it. Although chip and signature cards still have the more-secure computer chip, they require a signature for the transaction, rather than a PIN.
Some U.S. cards have PIN capabilities, though, meaning that, if a terminal abroad requires a PIN, you can use one. Select cards from Wells Fargo, the Barclaycard Arrival Plus World Elite MasterCard and the Sam’s Club card, for example, now have the ability to function as chip-and-PIN cards, when needed.
Chip and PIN EMV cards to the rescue?
Even if every card issued in the U.S. gets a chip, those cards will offer no extra defense unless retailers update their equipment from their antiquated mag stripe card readers. That will cost merchants money (as in hundreds of millions), but the card networks (Visa, MasterCard, AmEx and Discover) are giving both them and card-issuing banks an incentive (both a carrot and a stick) to upgrade by October 2015. At that point, the networks will institute a “fraud liability shift.” That’s a fancy way of saying “adapt or pay.” If a consumer’s card is involved in fraud, whichever party involved in the transaction (the bank that issued the card or the merchant that accepted it) that didn’t upgrade to EMV will be held accountable.
Where can I get one in 2015?
Many cards have been upgraded well in advance of the 2015 liability shift deadline.
Given the prevalence of EMV throughout the world, banks have realized that smart cards are a travel benefit that can be touted, just like travel insurance and no foreign transaction fees. Many of the major issuers therefore already have them, as well as some credit unions (including Pentagon Federal, State Department Federal and Andrews Federal).
Use the chart below to find out which issuers are providing EMV chip cards for Americans. This list is periodically updated as new cards come onto the market. Please note that technically speaking, most of the cards issued in the US are chip and signature. A few, however, have PIN capabilities. That means you can set a PIN, allowing the card to be used in situations where a PIN is required (generally at unmanned payment terminals abroad). However, even signature-based EMV chips will still work with most international merchants (a possible exception being unmanned terminals at gas stations and tollbooths). If you notice your card is listed on the chart, but doesn’t have a chip, you can request a replacement from your issuer.
Read on after the chart for a closer look at some chip and PIN cards that are particularly good for travelers.
|Compare U.S. EMV card offerings|
|Financial institution||U.S. cards with chips||Other details|
|American Express (a CreditCardForum advertising partner)||Various consumer, OPEN and corporate cards, including Delta SkyMiles||If your card doesn't come with a chip, request one by calling the number on the back of the card.|
|Bank of America||Merrill Lynch-issued cards; BankAmericard Travel Rewards; BankAmericard Cash Rewards; airline cards for Virgin Atlantic, Alaska and Asiana; Royal Caribbean and Norwegian cruise line cards; consumer and small business debit cards|
|Barclaycard||Aviator cards; Hawaiian Airlines World Elite MasterCard; Barclaycard Arrival; Plus™ World Elite MasterCard® Apple Rewards card; Carnival World MasterCard; Diamond Resorts International MasterCard|| Barclaycard Arrival Plus will have ability to set a PIN.
Apple card is chip and PIN.
|Capital One||Select cards, including Venture and Venture One||Plans to implement EMV on most of its cards by end of 2015.|
|JPMorgan Chase||Sapphire Preferred; Chase Freedom; Chase Slate; Ritz-Carlton Rewards; Hyatt Credit Card, JPMorgan Palladium;British Airways Visa Signature; Marriott Rewards Premier; Southwest Rapid Rewards Premier|
|Citi||Simplicity; Double Cash; ThankYou cards; Citi Prestige; AAdvantage Platinum Select; AAdvantage Executive; AAdvantage Gold; Diamond Preferred; Expedia+; Expedia+ Voyager; Hilton HHonors cards; AT&T Access card||If your current card doesn't have a chip, you can request a replacement online.|
|Discover||It cards||Available upon request.|
|USAA||Preferred Cash Rewards World MasterCard; Cash Rewards World MasterCard; Cashback Rewards Plus American Express card||Expects to have all its credit and debit cards replaced by early 2016.|
|US Bank||FlexPerks Travel Rewards (Visa and AmEx); FlexPerks Select+ cards (Visa and AmEx); SKYPASS cards; Cash+ card; REI card||Current cardholders can expect to be issued a chip card on their expiration dates. Replacements issued sooner will be chip enabled.|
|Wells Fargo||Cash Back Visa and Visa Signature; Propel World American Express; Propel 365 American Express; Platinum Visa; Secured card; Wells Fargo Visa Signature; Home Rebate Visa and Visa Signature; Rewards Visa; Cash Back College card||Existing cardholders will have their cards replaced over time, but you can request one sooner. New applicants will automatically receive chip cards.|
|Synchrony Bank||Sam's Club 5-3-1 card; Wal-Mart MasterCard||Sam's Club card will have the ability to set a PIN. The non-MasterCard version of the Wal-Mart card does not have an EMV chip.|
|Diners Club||Diners Club Card, Carte Blanche Card, Diners Club Card Premier, Diners Club Card Elite|
Best EMV cards for travelers
British Airways Visa Signature Card
Chase was the first major U.S. bank to make EMV a priority. One of the first cards they added this feature to was the British Airways Visa Signature (since 2011). The rewards program on it is pretty good: 1 Avios points per dollar on regular purchases and 3 Avios on British Airways purchases.
Don’t fly British Airways? You can redeem points with their partner, American Airlines, for domestic flights in the U.S. There’s no dilution in point value when you do that, so it’s a great deal.
Other benefits include no foreign transaction fees and a British Airways companion ticket (aka “Travel Together” ticket) every year you spend at least $30,000 on your card. The annual fee is $95.
American Express Platinum Card
The annual fee is $450, and it’s NOT waived the first year. So be prepared to pay $450 on your first billing statement. This may seem expensive, but trust me, if you travel a lot, the benefits are well worth it. A few of the most impressive perks are:
- $200 per year in airline fee refunds for qualifying airlines – Receive up to $200 in statement credits every year for reimbursement of baggage fees, in-flight meals/entertainment, flight-change fees, etc. You can choose one qualifying airline for this each year.
- Airport lounge access – Cardmembers get a complimentary Priority Pass Select membership, which allows access to more than 600 lounges worldwide. In addition, you get access to participating Delta Sky Clubs when flying with them, Airspace lounges and Centurion lounges.
- Valuable benefits at numerous hotels – Through the Fine Hotels & Resorts program, you can get free room upgrades, 4 p.m. late checkout and more when available at many participating properties.
- Convert points to frequent flyer/hotel programs at a 1-to-1 basis – Convert your Membership Rewards to various frequent flier accounts, including Delta, Virgin Atlantic, British Airways, Frontier, Air Canada, AeroMexico, KrisFlyer, KLM/Air France, Iberia, ANA and more.
Get 40,000 Membership Reward® points after you spend $3,000 in purchases with your new card in the first three months. American Express is a CreditCardForum advertising partner.
Updated Oct. 1, 2015