As most people have noticed, credit and debit card technology is evolving. New cards are coming with a computer chip on them, called an EMV chip. The whole reason is for security.
The major problem with traditional cards that only have the mag strip that you swipe to make a purchase is known as a replay attack. This means that a thief collects your information (card number, security code, name and expiration date) and can then re-use the same information to make fraudulent purchases at a later time. The new chip adds more security by creating a one-time-use code that does not get re-used on future transactions.
I saw an article by Dave Ramsey recently about this topic. I found the information to be relevant and I think it does a nice job doing what I try to do on this blog - explain technical information in easy to understand language. I encourage you to take a few minutes and read the article for yourself.
Dave Ramsey article titled Chip Debit Cards: What you need to know.
