The Credit Card Chip: How Does It keep Travelers Safer?

Staying safe when you travel includes ensuring your money and personal identity stay safe. From making reservations to point-of-sale transactions, Serendipity TravelingMom Dee Dean says the new credit card chip can make travel safer.

Traveling with a Chip Card

I have had fraudulent purchases charged to my debit card. It is absolutely no picnic to have to deal with, especially when travelling overseas. It happened 2 weeks into my trip to Salamanca Spain. I am just so thankful that my bank was helpful and that I was able to recover the money that was stolen from my account.

Recent (and fairly massive) cyber attacks have affected businesses from Netflix to PayPal and even personal blogs. In the past two years, banks in the United States have rolled out new debit and credit cards. These are chip cards. They have a chip embedded on the card itself, replacing the magnetic stripe. These chip credit cards are touted as being safer for us when making transactions.

But what makes the chip better?

A little history of the credit card

Who remembers the days when a clerk used a machine to manually imprint your credit cards? Then he or she would write in your name and other information on the carbon paper. The last step would be to call in the charge to verify it. Whew…that was a lot of work to charge something!

Well, we have come a little farther than that, and the magnetic stripe helped to get us there. That stripe on the back of the card holds the credit card number and cardholder information in it. When the card is swiped, it “talks” to the card reader via a phone or internet connection. It can recite this precious personal information to any machine that can read it, legitimate or otherwise. That credit card stripe makes our information vulnerable.

Chip Card offers another layer of protection

The chip that is now in our debit and credit cards is a pretty neat deal. The same information that was on the stripe is now encrypted (extra security layer #1). When I insert my chip into the reader, it and the card have an encrypted conversation to verify my account and ensure the money is there.

But here is the pièce de ré·sis·tance: The chip card does NOT leave my protected information with the merchant. The information from the magnetic stripe on older credit cards can be stored in the merchant’s database. If  the business is hacked, my information is vulnerable. But since the information on a chip card is encrypted, if the merchant is hacked, my credit card info is nowhere to be found in that database. That is a win to me!

Helpful news for traveling

While nothing is perfect, it’s good news to know that the chip is actually an extra layer of protection (and not a tracking chip, like the gentleman behind me at the grocery store swore that it was.) It discourages fraud and is difficult to counterfeit.

Here are some additional traveling tips to make your sensitive information less vulnerable:

• Use the chip card in the U.S. and internationally for the extra layer of encryption

• Alert your bank as to when you will be traveling. Many banks monitor spending patterns of customers, and they will shut down access to a credit card if they see something out of the ordinary. On my recent trip to Alaska, I forgot to alert my credit union of my travel plans. Yes, I was denied access as I made a purchase, on a weekend. Yikes. Only after I made a verifying call to my bank was my purchasing power restored!

• Use a balance of cash and card when traveling, unless you use a mileage card to rack up points. My husband encourages me to use cash for things like grabbing food from a fast food restaurant. That way, I don’t use my credit card for small purchases.

How do you stay safe in cyberspace while traveling?