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Is Credit Card Chip Technology a Good Thing?


Many consumers have recently received new credit or debit cards with metallic chips as well as the standard magnetic strip. So, why was the chip added? In short, the chip was added to reduce the chance of credit and debit card fraud. Security has become a top concern for most consumers and they expect their banks and credit card companies to take action to protect their financial information.

In order for your credit or debit card to work, they must contain payment information. When you use your card to make a payment, the merchant uses the information to authorize the transaction. Both the magnetic strip and the chip contain this critical information. The chip is an important safety feature because it is more difficult for scammers to make a fake chip than to make a fake magnetic strip.

The use of the chip does not alter your legal protections that safeguard you from fraud, but it is still imperative that you review every credit card and debit card statement to confirm the charges are legitimate.

If your credit or debit card has the chip, you should insert the card in the slot at the front of the terminal instead of swiping the magnetic strip. It typically takes the terminal a little longer to read the chip, so make sure the terminal confirms it is time to remove the card before doing so. It should be noted that not all retailers have terminals that read chip cards, so in that case you must scan the magnetic strip.

There is no law that requires your credit card (or debit card) company to provide you with a chip card, but more and more companies are doing so in order to protect their customers as well as reduce their liability for credit card fraud.

In the meantime, all consumers should continue to check their monthly statements to verify the charges belong to them. If unauthorized charges appear (no matter how big or small), you should notify your credit or debit card company immediately. You should also cancel your card and request a new one in order to prevent any further fraudulent charges.

Contact the Orange, Riverside and Alameda law firm of Fitzgerald & Campbell, California’s premier debtor protection law firm. We can work with you to create a debtor protection plan and can work to halt harassment and reduce and eliminate debt. Contact us for a consultation by calling (844) 431-3851 or emailing us at

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