5 things you need to know about chip-enabled credit cards

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The way you use your credit card is changing. By Oct. 1, all Americans should have received new credit cards embedded with a computer chip that is designed to combat fraud and improve security.

Here are five things you need to know about this new chip technology.

1) What is it?

The new credit cards that you will be receiving will have EMV chip technology. It is named after its original developers - Europay, MasterCard and Visa.

With these cards, a microprocessor chip is embedded into them and will provide another layer of security when making a purchase.

These chips will transmit a one-time single-use code when they are inserted into a card reader to validate your transaction. Even if the code is stolen, thieves can't use it to make other purchases.

2) Where do I get it and how do I use it?

If you haven't received it already, your replacement chip-enabled credit or debit cards should be automatically be issued by your bank, so there shouldn't be anything you need to do. But if you haven't gotten it yet, you should contact your bank on the back of your card to get a new one.

However, banks say it could take until 2016 to replace all Americans' credit and debit cards.

These new chip cards will still come with the magnetic strip that you're used to when you swipe them at the store. But with this new technology, you will be required to insert your card into an ATM-like card reader slot for a few seconds as you follow prompts on the screen of the card reader.

3) Chip technology is not new to other parts of the world

This technology has been around for a while. It was first used in France in 1992 and there are one billion EMV chip cards used around the world and is in use in over 130 countries.

"In Europe and other places, they have started using chip and PIN, so not only do you have a computer chip in your card, you also have to input a PIN -- a four-digit code that identifies you as being the rightful user of that credit card," said Gerri Willis of the FOX Business Network.

4) Despite the increase in security, it's not completely thief-proof

Right now, a lot of U.S. businesses are not requiring the use of a PIN for transactions.

"We're not doing that part yet or at least most of the credit card operators aren't doing that yet, but step by step, hopefully we get to it," Willis told us.

She also added, "It's easier for these thieves to break in with just a chip and not the PIN, so if you have the two layers of protection, it's much better."

Also, the new chip cards won't be able to stop a thief from using stolen credit card information to make fraudulent purchases online.

"If you're worried that you have had your identity stolen, a lot of people put fraud alerts on their credit reports and you need to do more than that," said Willis. "You need a credit freeze so that nobody can get access to your credit information unless they are you. That's my best advice."

5) Shift in liability for businesses

Credit card processers such as Visa and Mastercard set a deadline for Oct. 1 for merchants to migrate to this EMV chip technology and get their equipment changed to accept the new cards.

There is a lot of motivation for businesses and credit card companies to switch over to this technology.

"The onus is going to be on whichever company had the worst technology, so if it's a credit card company or if the retailer, they are going to have to pick up the tab," said Willis. "As you know, if you had fraudulent use of your credit card in the past, you could just call up the credit card company, tell them that it was used badly and they would write off that charge. But now, let's say the credit card company had poor technology. They are going to be the ones who are at fault and have to eat it. Or it could be the retailer too. So that's the big change that is driving everything coming to consumers right now."