Why Your Credit Card is Smarter than You

posted 6/2/2015 in Banking

What is the chip on my credit card

So what is this chip card I keep hearing about?

One of the hot topics around the water cooler these days seems to be the new chip many are finding in their credit cards. You may have heard it called several things now including smart chip cards, smart cards and EMV cards.

But what exactly is this new technology?

Put simply, the EMV card is a credit card that includes a small microchip in addition to the standard magnetic strip you would find on a traditional credit card. This means when you pay for something at a retailer, the terminal will read the microchip instead of the traditional “swipe” we are used to now. You may have seen these new terminals at large retailers like Walmart and Target that have already started making this transition.

So where did EMV come from?

EMV stems from Europay, MasterCard, and Visa, or the organizations driving the bus when it comes to transitioning the U.S. to the new technology. Although this technology is relatively new to the U.S. (only 31% of American credit card holders have an EMV chip according to a recent Creditcards.com survey) this technology has been widely implemented in 80 other countries, making the U.S. somewhat late to the game. By making this switch universal, citizens across the world will be able to use their credit card no matter where they may find themselves. But this may just be the icing on the very large chocolate cake. By implementing EMV cards, these companies are actually hoping to reduce credit card fraud.

Say what? How does EMV help reduce credit card fraud?

We’ve all heard about the massive data breaches that seem to be all too commonplace these days. Hackers steal customer credit card information from retailers and then parlay that into spending millions of dollars of “magic” money. The new EMV card just may be the key to reducing this risk and hopefully saving everyone money. The EMV card stores all information on a microchip that changes at each transaction, meaning that even if hackers were to steal the information, it would be too outdated to use. This is much more secure than the static information that is housed on the traditional magnetic strip on cards we use now, giving us all incentive to hop on the EMV bandwagon.

Now that you know what it is, find out what exactly makes the chip better than the strip!

-Lincoln Savings Bank, Member FDIC.


Dooley, Terry. “Nearly a Third of American Credit Cardholders Have #EMV Plastic in their Wallets.” The SHAZAM Network Blog. SHAZAM. Web. 13 May 2015. 

“EMV Chip Payment Technology Frequently Asked Questions.” Smart Card Alliance. Web. 13 May 2015. 

Groenfeldt, Tom. “American Credit Cards Improving Security With EMV, At Last.” Forbes. Web. 13 May 2015. 

Kossman, Sienna. “8 FAQs about EMV credit cards.” Creditcards.com. Web. 13 May 2015. 

Tausche, Kayla. “ ‘Massive’ switch to new credit cards ahead.” CNBC. Web. 13 May 2015. 

“Visa Announces U.S. Participation in Global Point-of-Sale Counterfeit Liability Shift.” Visa Bulletin. Visa. Web. 13 May 2015. 

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