Bensman Risk Management, Inc.


Insurable Interests

Bensman Risk Management, Inc.
2333 Waukegan Road Suite 275
Bannockburn, IL 60015
847-572-0800 Phone
847-572-0502 Fax

Insurable Interests may offer general financial, insurance, tax and business ideas. However, due to the ever-changing tax laws as well as the complexity of the financial industry, you should seek professional advice before implementing any of the ideas contained in this newsletter. The Bensman Group, Bensman Associates Ltd., Bensman Risk Management, Inc. or Schemata, L.L.C. assumes no liability whatsoever in connection with the use of this newsletter.

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Securities offered through Kestra Investment Services, LLC (Kestra IS), Member FINRA/SIPC. Investment Advisory Services offered through Kestra Advisory Services, LLC (Kestra AS). Kestra IS and Kestra AS are not affiliated with The Bensman Group, Bensman Associates Ltd., Bensman Risk Management, Inc. or Schemata, L.L.C.

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Insurable Interests

Vol. 11, Issue 5January 2016

FINANCIAL INTERESTS

What's the Deal with Chip Credit Cards?

You probably have received new credit cards to replace your old cards, which had a magnetic strip that you swiped to make a purchase. The new cards employ microchip technology, which has been used in Europe and elsewhere for some time but is fairly recent in the United States.

The main impetus for the switch to chip technology is that it can help to prevent certain kinds of fraud, such as the massive credit card breaches at major retailers such as Target. The new cards are fraud-resistant rather than fraud-proof, however. They help prevent the kind of fraud in which thieves steal data from a card’s magnetic strip. Basically, a chip-based card creates a new transaction code every time you use it, while a magnetic strip does not.

Many U.S. cards with chips also have a magnetic strip, mainly because not all merchants have the ability to read a chip-based card. However, if you try to swipe the magnetic strip in a machine that reads chips, you will be prompted to use the chip to complete your transaction.

Most of the cards being issued in the United States, while similar to cards that are in use in other countries, don’t go quite as far to prevent fraud. In many countries, you complete the chip-based transaction by entering a personal identification number (PIN), much like you do with a debit card or ATM, rather than with a signature. This makes the technology even more secure. However, at this time most U.S. cards still use the signature.

It also is important to note that a chip – with or without the PIN -- cannot prevent a thief from using a stolen card before the theft is reported, and it cannot prevent someone from stealing credit card numbers and using the card to buy something over the phone.

So the new technology does not mean that you can stop worrying about credit card fraud. Experts say you should continue to take precautions, including:

  • Keeping track of your card and notifying the card issuer if you think the card might have been stolen. If it turns out you just lost it temporarily, you can always call them back and reactivate the card.

  • Checking your accounts regularly to ensure that there are no unusual transactions. If you see anything suspicious, notify your card issuer immediately.

  • Checking your credit report regularly. Unusual entries on your credit report can alert you to possible fraud.
Credit cards make shopping much easier, and the new chip cards make it safer. But there is no substitute for being vigilant in protecting your credit.

This article was created by Osmosis Digital Marketing for use with permission by The Bensman Group.

Photo: iStockphoto.com

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