A friend who works for Navy Federal Credit Union (NFCU) just told me that I should be expecting new credit cards in the mail relatively soon. I asked if they would be chip-and-PIN cards, and she said that they would be would contain chips but would not have the PIN capability. What this means for you as a consumer is that you’ll have some benefits of a chipped credit card, but not the full functionality of a true chip and PIN card.
Credit card technology has changed significantly over the last handful of years. Cards can be made with little microchips that are nearly impossible to duplicate, and when used in conjunction with a personal identification number (PIN), fraud decreases even further.
The cards that Navy Federal will be issuing are equipped with a chip, but do not have the PIN feature. These are sometimes called chip and signature cards. This means that you will insert the card into the reader, and it will spit out a signature slip like cards that have magnetic stripes that are swiped. The benefit of the chip is that it is harder to copy a card that has a chip in it. The bulk of credit card fraud in the US comes from counterfeit cards, often made with the information obtained by illegal skimmers. The move to chip credit cards will greatly curtail this particular type of credit card fraud.
The next step in credit card technology is the chip used in combination with a PIN. When a transaction utilizes a card with a chip and a user-entered PIN at the time of sale, the signature portion of the process is eliminated. (And let’s be realistic – how many times does that signature get checked, anyway?) Chip and PIN technology has been widely adopted across Europe, and it is allegedly coming to the US at some point in the near future. This would be a great benefit to US travelers who are in Europe. (If we ever meet, ask me about the time we needed gas in rural France at midnight.)
Per their Facebook page, NFCU has been testing their new chip and signature cards with small groups of customers, and expects a full roll-out “soon.” One reader reported that her Navy Federal homepage briefly promised that these cards would be issued by 1 April 2015, but that notice has since been removed. (I didn’t see it, so I can’t verify that information.)
If you carry a Navy Federal credit card, you can expect to see a chip-carrying card showing up in your mailbox at some point the undermined future. It’s legit, and it is supposed to be there. Be aware that it is a chip-and-signature card, not a chip and PIN card, so you’ll still need a backup form of payment when traveling.