WTVM Special Report: Chip Credit Cards - WTVM.com-Columbus, GA News Weather & Sports

WTVM Special Report: Chip Credit Cards

COLUMBUS, GA (WTVM) – You may already have one of those fancy new chip credit cards and that may have you thinking you are safe from ID theft or fraud. 

But first, there's something you should know about these first generation chip cards and if retailers are ready for them. 

News Leader 9's Semone Doughton has the 4-1-1 on Chip Credit Cards.

Some of our favorite stores are sporting new, high-tech credit card terminals.

They're for new, high-tech credit cards coming soon that will bust a chip on any bad guy trying to hack them, but are all retailers ready for them?

By October 1, all retailers must upgrade their credit and debit card terminals to chip card technology.

Unlike standard cards with that magnetic strip on the back that holds your account number and everything a thief or hacker needs to rip you off, the new cards have a chip embedded. 

When inserted in the new terminals, the chip replaces your card number with a unique, substitute number on every transaction.

"It actually scrambles the number so it is very difficult to steal," said Bill Hardekopf, CEO of LowCards.com

Bob Dickey of Hernando, Miss. likes the sound of chip credit and debit cards, especially since the big Target data breach in 2013 snared both his and his wife's card information.

"I'd love to know that we had a better way to protect ourselves from all that," Dickey said. 

But here's the thing – a lot of stores that already have the chip card terminals aren't ready to activate them yet.

So until those retailers can catch up, card-issuers are sending customers chip cards that still have that magnetic strip on the back.

"As long as the strip is on there, you have un-encrypted information that can be read fairly easily," said Jeff Horton, IT/Card Security Expert. "So the card can be stolen. You can read information off of that."

This means unless you're at a store with a terminal that already scrambles card numbers for your protection, you'll have to treat your first chip card like it's a standard card.

So follow the standard rules:

Don't use a chip debit card at a full-service restaurant, a gas pump or somewhere where you cannot witness the swipe. Only use a chip credit card at those locations.  

Remember, the first chip cards still have the magnetic strip on the back. At least with a credit card, you have built-in protections that will reimburse the charges if someone lifts your number off that strip and goes on a spending spree.

To add to those protections, see if your credit card company offers a smart phone app for transaction alerts.

American Express has one for data security expert Jeff Horton the second a charge hits his account.

"I get a text message that alerts me to that charge," Horton said. 

Once all retailers are on board, the banks will start issuing cards that have the chip but no more magnetic strip on the back.

Retailers must get on board by October or else they will be liable for card theft at their locations.

In Europe, where the chip cards are now the standard, card theft has been cut by a third.

Join the conversation on social media by using #ChipCreditCards. 

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