Chip Credit Cards Are More Secure, but Fraud Risks Remain

EMV chips reduce counterfeiting, but criminals continue to find new ways to steal

Chip-enabled credit and debit cards, known as EMV cards, were introduced in the United States to make counterfeiting harder than it was with magnetic stripe cards. They have succeeded in reducing cloned card fraud at stores that use chip terminals. Even so, criminals have adapted by focusing on areas where chip protection does not apply, such as online purchases or transactions at merchants that still allow swiping.

How chip technology helps

The chip’s strength lies in how it processes data. Magnetic stripes carry static information that can be copied and reused, which made skimming devices highly effective. A chip generates a unique one-time code for every purchase. That code cannot be reused, so stolen data from a single transaction is worthless. Because EMV is the global standard, cards issued in the United States now work more reliably abroad and provide consistent protection when traveling.

Where vulnerabilities remain

Fraud has not disappeared. Card not present transactions, such as online or phone orders, remain vulnerable. In those cases, the chip is not involved and only the printed card details are needed. Data breaches and phishing schemes continue to feed criminals the information they need. Physical theft is also a risk. Many U.S. cards can still be used with a signature instead of a PIN, and most still carry a magnetic stripe. If a card is stolen, a thief may be able to use it until the loss is reported.

Steps consumers can take

Consumers can reduce risk by combining EMV protection with good habits. Monitoring accounts closely and setting up transaction alerts helps spot fraud early. Banks often allow text or email notices when cards are used, which shortens response time. Using two factor authentication for online accounts and wallets adds another barrier if account information is stolen. Destroy old cards when replacements arrive and remove expired numbers from any saved profiles at online retailers.

Red flags to recognize

• Unexpected charges appearing on your account, even small amounts.
• Merchants requesting you to swipe instead of inserting your chip card.
• Emails or texts asking for your full card number or security code.
• Multiple declined transactions when your account is in good standing.

If you already called or paid

If fraud occurs, quick action matters. Contact your bank immediately to freeze or replace the card and dispute unauthorized charges. Update online accounts that stored the compromised number and review recent activity for additional misuse. If identity theft is suspected, consider placing a fraud alert or credit freeze with the major credit bureaus. Keep records of calls and confirmations in case they are needed during the dispute process.

Quick checklist

• Use the chip or contactless option instead of swiping.
• Do not share card details by email, phone, or text unless you initiated the contact.
• Set up purchase alerts and review statements weekly.
• Check your free annual credit reports for unusual accounts or inquiries.
• Report lost or stolen cards to your issuer right away.

Chip technology has reduced counterfeit fraud and improved payment security, but it has not ended fraud. Criminals now exploit weak spots such as online shopping or merchants that still allow swiping. Combining EMV protections with careful monitoring, alerts, and fast reporting gives consumers the best chance of limiting losses.

Where to report problems

• NC Attorney General’s Consumer Protection Division - File a complaint about fraud or card misuse.
• Federal Trade Commission - Report fraud and identity theft through the FTC portal.
• Consumer Financial Protection Bureau - Submit complaints about credit card billing, fraud disputes, or bank practices.