It’s time to drop the credit card condoms. There’s a better way to protect yourself against identity theft.If you’ve ever had your credit card information stolen, you probably noticed that banks are pretty adept when it comes to clearing fraudulent charges and shipping you new plastic within a week.
But the truth is they could do a lot more to prevent identity theft in the first place–namely, investing in smart card technology.
What sets “smart cards” apart from whatever’s in your wallet right now is the tiny EMV microchip buried inside.
The chip calls for a unique pin in order to use the card, which is different than the regular magnetic strips on the backs of credit cards. Those strips carry all your account information and can easily be scanned or deleted. (See 6 ways to prevent identity theft.)
The EMV microchip is also encrypted, meaning it can’t be read by, say, a thief toting a credit card-scanner in their coat pocket on a crowded subway train.
The problem is the U.S. is way behind when it comes to adopting smart card technology. Canada recently started widespread use of EMV chips and they’ve been a part of the banking and health insurance sector in Europe for years.
A few banks offer the service, like Wells Fargo, and any Visa customer can sign up for Verified by Visa, which prompts customers for a username and password before they’re able to complete an online purchase.
In December, Chase partnered with British Airways to offer its British Airways Visa card with an EMV chip.
Apart from making their financial information more secure, smart cards would make life for frequent travellers much simpler since EMV chip cards are more widely accepted than American credit cards abroad, according to Nerdwallet CEO Tim Chen.
Until the U.S. banking industry catches up with the rest of the world, the best you can do for now is check with your bank or credit card company to see if they offer a smart card option.