February 9, 2006

The Chip and Pin D-Day is February 14th 2006. Consumers who possess a credit card with a chip will now have to use their personal identification number (PIN) when making over the counter purchases.

Why Chip and Pin?

Due to ever increasing credit card fraud, Chip and Pin was introduced 18 months ago on a trial basis in selected areas. The results were staggering and credit card fraud fell by 80%.

What is Chip and Pin?

The new have a chip installed and the credit card terminal reads this chip. You are then asked to input your PIN. No one else should know your PIN and no one should ask you for your PIN. There is no need for a signature, thus decreasing the chance of someone forging your signature.

What do I do?

Well first, the banks have been reissuing consumers with updated chipped over the last 18 months and records show that over 90% of are now chipped. On receiving your new credit card you will have received an allocated PIN. If you find that this PIN is hard to remember you can easily change it at an ATM cash machine. Also, if you have more than one credit card you can have the same PIN for all.

If you decide to change your PIN please try and be original and do not opt for your house number or date of birth. Try merging two important numbers that will be easily remembered.

When you buy goods and use your credit card you will be asked to enter your PIN onto a pad. You should not ask the sales assistant to do this; it must be done by you. Not all retailers have the new Chip and Pin technology and you will still be asked for a signature in these stores.

If you forget your PIN you will have to ask the bank for a new one. This may take a few days.

What are the advantages of the Chip and Pin system?

Obviously the reduction of credit card fraud is a major benefit to all of us. In 2004 credit card fraud amounted to £400million. Another advantage is that you will be served more quickly in retail outlets as the Chip and Pin system reduces wait times for people to be served.

Disadvantages?

There are not any major disadvantages only small changes that might not suit everyone. With the February 14th deadline consumers who do not know their PIN will in all probability be asked to pay by other means.

If you happened to forget your PIN and asked the bank to issue with a new one you will be unable to use your credit card while waiting.

I do not have a credit card with a chip, what do I do?

Call your bank and ask them to issue you with a new credit card. You may still use your credit card without a chip and stores will have to accept your signature.

There will be a number of exclusions for the Chip and Pin system and these include card holders from overseas who have an old style chip and signature card, disabled customers who have a chip and signature card and consumers who are still waiting for their Chip and Pin upgrade