Chip and pin vs magnetic stripe cards

Really depends on what you want to use them for. For getting cash from ATM's - no problem; making purchases at most shops - no problem; buying rail/metro tickets from machines, automated (non-attended) gas pumps, vendors at markets - probably a problem but not always. I don't find it necessary to run out and get a chip & pin card just for traveling in Europe - that day may come but not yet. Best solution is to use your normal ATM debit card and pay cash except for large purchases. I spent 2 months in France the summer before last and never encountered a problem. Other countries I can't speak to.

We were there six months ago, the magnetic stripe worked fine. However, we tend to use cash about 95% of the time so don't try to use a credit card that much.

I agree with Nancy. In general, magnetic stripe cards are not a problem. At smaller merchants, markets, restaurants, I would tend to use cash. I have never encountered a problem with using a magnetic stripe card at a gas station, but have never used an unmanned one. I use my debit card (magnetic stripe) to get money from a bank ATM, and I use my magnetic stripe credit card for larger purchases or hotel bills.

Cash (from the ATM) is king -- except when you're running low on gas and the station is unmanned. Other than that one occasion we spent a month in France and Austria using mag-stripe cards with no problems.

Not many sources of chip & pin's in the U.S. since few merchants are setup to handle them.

I've had no problem in Europe with the magnetic strips. If a merchant has problems with the swipe, he can always key in the numbers. Same way in the U.S.--sign the receipt.

I still try to use regular credit cards for hotel rooms, car rentals, meals and gasoline--to preserve cash gotten out of an ATM. What's hard is rationing out my cash toward the last day or two in a given country. My goal is to come home with a net no foreign currency in my pocket.

Absolute necessity ? Not yet . Useful and handy ? No Question . I'm not going to rehash any of the answers already posted here , they are all accurate and I can't add anything that hasn't already been said , however a few salient points might be of help . I have two Andrews FCU cards ( two separate accounts ) and have found them very useful in cases where you make what is termed an offline transaction .This means that the POS terminal is not connected to the internet in order to receive an authorization . The authorization process uses a PIN which is encoded to the card and entering it in the transaction allows it to function as a relay ( electronic switch ) that verifies the PIN and completes the transaction . This is particularly useful at ticket kiosks , unmanned gas stations , etc. Two examples come to mind from my recent trip ; Both the ticket machines in the Vienna and Paris metros required the Chip and Pin to work . In Vienna it saved waiting on a long line . Considering that ( with the right card ) there is no cost in obtaining one ,and minimal effort in doing so , I think they are a good idea . Two other considerations ; the bulk of cards available in the states are chip and signature , not chip and pin and there are many reasons the chip and pin is a superior product . Also ,even true chip and pin cards here ( Andrews FCU ) default to a chip and signature before engaging a pin function , so if you have such a card you will most often sign a receipt . It's when the pin is engaged by the card's program that it overrides the signature . Further down this page is a recent thread on the subject ,and most useful is a link to a chart explaining card availability in Michael Schneider's post .

Thank you!!

I note that all the cards listed on the link provided by StevieD are credit cards - no debit/ATM cards. Does that mean that if the ATMs in Europe ever go to Chip 'n Pin that we'll have to get cash advances to get cash at an ATM instead of just withdrawing it from our accounts?

Somewhat off-topic... but because this subject pops up often enough, here's an interesting article from The Economist on why the US may finally moving towards IC technology. Roughly, the cost of fraud from swipe cards is starting to overtake the cost of changing over the system:

"... alone among developed countries, the US (sic.) still relies relies exclusively on cards with magnetic strips, which are far less secure than the chip-and-PIN technology used elsewhere...
...At a series of Senate hearings earlier this month, Target's CFO said it would spend $100m to roll out chip-and-PIN store-issued credit cards and payment devices that accept them. A consumer advocate urged other card issuers to do the same. Though the switch may cost issuers and merchants as much as $8billion, interest at long last appears to be growing.... Many of those costs may be recoverable over time through lower fraud losses."

-The Economist, February 15th-21st 2014

Is the widespread adaptation in the US just around corner, is this just another in a long line of false starts? We shall see.

PS: The above is the proper method for citing a direct quote from someone else, rather than simply cutting and pasting and representing it as your own words. The poster this comment is directed at knows who they are.

One more interesting point to mention.....

I was recently speaking with a businessman that travels to the U.S. three or four times a week, and we discussed the topic of "Chip & PIN" cards. He insisted very definitely that C&P cards are now in common use in the U.S. in the places he regularly travels to (probably mostly the eastern business centres like NYC and Chicago). I was a bit surprised by this revelation, as I was still under the impression that most U.S. banks hadn't adopted C&P technology yet, nor were there many POS terminals available. I didn't have time to get more detail unfortunately.

I also read a report recently that stated that the large U.S. banks that issue cards are being "encouraged" to adopt the new technology, as after a specific date those issuers not using C&P technology will be completely liable for covering their own losses (wish I could remember where I saw it). It's possible that the recent issue with Target will accelerate the process.

^^ He was wrong. Especially in regards to Chicago. Chip & PIN cards do come with a magnetic strip (at least the ones I've seen) and can still be used in such readers. Maybe he thought that since his card worked, it was the chip technology that was working.

As Douglas says , these cards are equipped with both a chip and a magnetic strip . Usually , the manner in which the card is placed in the reader determines whether it is reading the chip or the strip , but not all the time ( think about gas station pumps stateside where even a strip card is inserted end to end ) . Normally a chip card is inserted in a reader , end of card facing in rather than a swipe . The way the card is programmed then determines the verification mode , so it can be difficult to detect how it is actually working . From the perspective of usage here in NYC , I have not encountered POS terminals that are chip capable and operable. The only progress I can report ( albeit anecdotally , for obvious reasons ) is that in recent months some major chain retail operations , like Staples , have installed POS terminals that are chip capable ( card is inserted , end into a shoe at the bottom of the device about a third of the way in ) . The slots , however , are blocked from use by a plastic insert since the supporting technology is not yet available for use . With the impending liability shift approaching , it seems that businesses are beginning to gear up for the changeover . I have also read that the cost of doing this will add about 1 USD to the cost of each card . A small price to pay for using current technology , but of course here in the states , all kinds of infrastructure are low priority . One other quick point about cards that use true chip and pin technology ; unlike swipe cards which are read virtually instantaneously , a chip and pin card works in a slower manner . Often , one needs to leave the card in the reader until instructed to remove it .

@ Tom: It is a case of the bear attacking the barefoot runner in the old joke (bear attacks 2 campers in their tent, first camper starts putting on his running shoes, second camper says "Why put on shoes? You can't out run a bear." First camper, "I don't have to out run the bear, I just have to out run you."). The US is finding out that the bears are eating their magstrip credit card accounts. After they finally switch, the hackers will turn their attention to cracking P&C and the arms race will go on.
And how do get those italics anyway?
@Lee: I've already encountered that situation in St Anton, and having a P&C credit card was a life saver.

Last year we were in a parking lot at Mt. St. Michel. When we arrived, there was an attendant, but when we left, there was no attendant. There was a machine where you had to insert a Chip and Pin card in order to get out of the parking lot. There was a big "arm" across the exit that lifted only after payment had been made...no cash, no magnetic strip card would work. We thought we were going to have to spend the night in the parking lot since it was a fenced lot and there were no other exits. There was one other car leaving the lot, but the people did not speak English. We finally just hugged their bumper and rushed through after them. It was a scary experience...I'll be glad when the US wakes up and joins the chip and pin world.

@steven,

"One other quick point about cards that use true chip and pin technology ; unlike swipe cards which are read virtually instantaneously , a chip and pin card works in a slower manner . Often , one needs to leave the card in the reader until instructed to remove it ."

It does take a bit longer to use C&P cards but the extra time is not significant. The usual procedure here is that the merchant enters the amount of the transaction in the POS terminal, the customer accepts the amount and then has the option of either swiping the card or inserting into the C&P slot. If C&P is used, when the customer enters their PIN the transaction is processed.

It's ALWAYS necessary to leave the card in the reader until instructed to remove it, as there's an internal mechanism in contact with each of the gold-plated points of the chip, and they're "holding" the card. Trying to forcibly remove the card before the terminal releases it could either damage the card and/or the terminal.

When the transition to C&P technology occurred here, some larger firms (especially those with numerous branches in different cities) took longer to make the change as their in-house software had to be re-configured for the new technology. The smaller "mom & pop" operations seemed to be much quicker in adopting the C&P cards.

One other interesting bit of trivia to mention is that paying with cards is probably more popular here now, due to the elimination of the penny from our currency. For those paying by cash, if the total amount isn't a multiple of five either the customer or the merchant makes a few cents on each transaction.

Cheers!

So, given Ken's last post, is it possible that another topic might be resolved? See "Canadians, are you rethinking RS tours because of the dollar?"

@ Ken , Many thanks for the further information on the cards . I , for one , was unaware of the issue regarding the contact points in the reader and knowing about that undoubtably saved me and many others from doing something unwise . Again , much appreciated !

@George,

The "Tap-and-Go" cards that you're referring to use RFID technology, which is separate and different than "Chip & PIN". Cards that contain the RFID chip will have a small "signal strength" logo on the front, in addition to the large gold chip.

The RFID cards are marketed by various credit card firms under different names. For example, MasterCard refers to this as PayPass and Visa uses the name PayWave. As I recall, this type of transaction can only be used for limited amounts, for example the MasterCard limit here is for transactions less than $100. You may be interested in having a look at THIS video about some of the potential risks with this type of technology (Note: cards which have only C&P technology can not be read in the same way, as they require physical contact with the reader).

There's another potential risk looming on the horizon, which may be a problem if NFC technology becomes a common feature with Smartphones. THIS video shows one possible scenario. A few phones have NFC now, but Apple may be ready to try it in the next iPhone, given their purchase of AuthenTec a few years ago. According to THIS article it's possible they may instead use BlueTooth to allow Smartphone payments rather than NFC.

Cheers!

Hi,

How recent? Well, as recently as of June of 2013, absolutely no problems using a magnetic stripe US credit card in Germany, nowhere was it denied nor turned down, restaurants, DB ticket machines, hotels/Pensionen, etc. Presumably, the same in Austria.

@Ken, You are referring to the info from FortWayne Karen's post that she linked to the Diane Rehm show, which was broadcast after the Target breach. One piece of info was that after October 2015 merchants will be responsible for paying the costs when fraud is committed instead of the card company if the merchant isn't using a chip and pin system. Karen added in a later post that as a business owner she has requested the chip and pin readers to no avail--so far. So something is going to be changing because no merchant is going to accept that cost.
@whoever asked: at Andrews Federal Credit Union the atm cards are still magnetic, though the credit cards are chip and pin.

Just got an email from Citibank saying they are replacing my American Airlines Platinum card with one that has a chip. The letter did not say anything about a pin. Not sure if it will also have the magnetic strip or not, but is supposed to arrive in the next ten days. I am planning a trip to Europe in September so I am interested in how this will work. To be safe I will probably take a credit card from another bank and my debit card as well.

Your card will have a magnetic strip otherwise it would not work in the US. You want your debit card to get money from ATMs. If you use your credit card you will pay high fees. It sounds like you card does not have a PIN. If it did your bank would have told you the PIN was coming by separate mail.

In October 2009 the unattended gas stations in Normandy region of France required chip and pin cards. We stopped at an attended gas station and had to use my ATM card as it would not take my magnetic stripe credit card. Also, in Denmark in 2008 we had to pay with our ATM card at a restaurant as our credit card did not work in the card machine. Friends who were in Paris 2 years ago were unable to buy a metro ticket at the kiosk using magnetic stripe credit cards. The answer is Yes.

Chip and Pin cards are available at Andrews Federal Credit Union (andrewsfcu.org). Follow instructions to join American Consumer Council, type in Consumer for Promo Code to be sponsored by Andrews FCU.

Wells Fargo is converting their credit cards to chip and pin. The Target breach is accelerating this conversion as well as a regulation that puts the issue of fraud on the retailer sometime in 2015. It's happening, slowly, but surely.

The biggest inconvenience in general would be in countries where use of signatures let alone mag stripe cards by residents has effectively died out, for example in France and the UK. Automated systems may be built around them, and cashiers may be unfamiliar with them, or unaware initially of how to process non-chip cards (after all, they could have been discontinued domestically before they were born). There is usually a way round though. The situation in some countries such as Germany is a bit easier as there remains a greater use of signatures rather than PIN.

To Marco's point, we were just in the UK and we have traditional mag stripe and we also have a chip and signature card.

My wife used her mag stripe card in a store and the young clerk was puzzled by it, he really did not know what to do with it. Of course another clerk knew the process, but it presented at least a slight issue.

In other places the chip and signature card at least eased the process. Many restaurants use portable units at the table. I noticed that many, but not all, also had a slide for the mag strip, and in one case where we did use a mag stripe, they needed to go to another unit by the register. The automated terminals in the tube stations also took my chip and signature card with no issues (and no signature)

So certainly no deal breakers on using mag cards, but expect a few stumbles or delays.

Hi all--I just read an article where Rick mentions that you should set up a pin for your US mag stripe credit cards to help with the chip & pin systems. I'm going to Scandinavia next month, so I set pins up for three of my cards (I'll mostly be using cash, but just in case...). However, a Capitol One representative told me that using my pin with my CapOne card would read that transaction as a cash advance and I'd be charged as such. What confuses me further is that a friend of mine used her CapOne card in Sweden last month and used her pin code frequently, and was never billed for a "cash advance." She used it at restaurants, shops, transit terminals etc. Have any of you been charged with a cash advance when using your mag stripe credit card with a pin? Thanks!

@ Leah - First of all - having a PIN on a traditional magnetic stripe card doesn't always work with chip reader machines - in fact my experience is that it rarely works. Most of the time you will need to have them swipe it the old fashioned way. You'll get a print out and then sign it. On the few rare occasions where using a PIN did seem to work (such as Sweden), it was not charged as a cash advance since it is a point of sale purchase. BUT - every card will have its own rules. If you use it in an ATM, then of course it is a cash advance.

I do highly recommend knowing your PIN so that you can use your credit card for cash advance at an ATM in case of emergency.

@leah,

Generally speaking, if you use a credit card to withdraw cash from an ATM, it will be treated as a cash advance with high interest charges accruing from the time the cash is withdrawn (since you're using the bank's money). It makes no difference whether a PIN is used to complete the transaction or not. To obtain cash during travels, It's a far better idea to use an ATM / debit card as you're accessing your own cash.

If you use a credit card for POS purchases (which is what it sounds like your friend was doing), normal interest charges will apply, according to the terms of that particular card. Again, whether or not a PIN is used is not an issue.

My credit card company (Capital One Visa) told me that the use of a PIN with a mag stripe credit card at an ATM is the equivalent of a cash advance. I don't think credit cards can be used with PINs in transactions anywhere besides ATMs, and you don't need a PIN to use a credit card except at an ATM. Are you sure your friend wasn't using a Capital One credit/debit card? You can switch between these but you only use a PIN for a debit transaction.

I don't think credit cards can be used with PINs in transactions anywhere besides ATMs, and you don't need a PIN to use a credit card except at an ATM.

Unless of course one is using a "Chip & PIN" card, in which case a PIN is mandatory to complete the transaction.

leah.yamshon,

you could start a new thread so your doesn't get lost in all of the old posts.

this is what i have found out and i will be doing some testing this sept and this has been my experience.

pulling $$$ out of an ATM all of my withdrawals (w/d) have been treated as an "cash advance". in the USA (at home) i can use this card and my PIN to w/d $$$ out of my checking/savings or as a cash advance. i have options. But from what i remember using the ATMs in Europe there isn't any options, but as i said, i will do some testing once i go over in sept. The one benefit from doing a cash advance is that i have w/d more than my 300 USD (or equivalent) limit. My credit union has a 300 USD/day limit. no if and or buts.

as far as using my credit card for purchases either in a restaurant or merchandise, its always been charged as normal. my credit untion/VISA does have a "international fee" and those show up too but never as a "cash advance".

happy trails.

I don't think credit cards can be used with PINs in transactions anywhere besides ATMs,

That's not true. It's rare in my experience, but I've done it before.

FYI to some other posters, Leah was asking about using a PIN to complete a point of sale transaction, not at an ATM for cash advance. She was asking though if it might be treated as a cash advance.

Another article about the chip and pin credit cards, http://www.washingtonpost.com/lifestyle/travel/chip-and-pin-cards-coming-soon-hopefully-to-a-us-bank-near-you-youll-need-them/2014/06/19/1c3a72e6-f651-11e3-a606-946fd632f9f1_story.html?hpid=z4