7.4 Chip and PIN for your credit card

After February 14 2006, the way people authorised payments on goods by plastic cards changed from a signature based system to one which uses a ‘Chip and PIN’.

The new Chip and PIN system was introduced to try to reduce plastic card fraud.

The idea behind the system is that when you use your credit card to make a purchase, you have to enter your secret 4-digit Personal Identification Number, which you use at cash machines, instead of signing a paper receipt to authorise the payment.

This helps to reduce fraud because technically, only you should know your PIN. In contrast, your signature could be easily replicated and used to authorise payments by fraudsters.

Some cardholders are still allowed to use their signature to authorise card payments including cardholders from abroad who have not yet been issued with a Chip and PIN card and disabled cardholders who have a Chip and Signature card.

The introduction of the Chip and PIN system has placed even more emphasis on the importance of keeping your PIN totally secure because now, instead of your PIN giving you access to just money from the cash point, it gives access to your funds in hundreds of thousands of shops – a potential haven for fraudsters.

Back to Guide to Credit Cards Contents

Product Offers
Please ensure that you fully read the terms & conditions of any product or policy before you decide to proceed and are fully aware of the total costs and the benefits and any exclusions or limitations applicable to the product or plan.

Please note that the product links will take you direct to the Issuer or Insurer's site direct and we cannot be held responsible for the information which they provide within their own sites. On some comparison tables we use a star rating which rates products by visitor popularity.