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Innovations and Payment Systems

Chip-and-PIN cards: Do you need one?

You don’t have to be a frequent traveler to benefit from having a chip-and-PIN card from one of these issuers

Summary

While cardholders in most other countries punch in a PIN to verify their identities, most American issuers require a signature instead. However, even if chip and PIN cards aren’t the standard in the U.S., there are still some reasons it might be good to have one.

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Travelers were the first to embrace cards with embedded EMV microchips because they made using American credit cards overseas a lot easier.

But there’s still a key difference between American cards and their international counterparts: While cardholders in most other countries punch in a PIN to verify their identities, most American issuers require a signature instead.

And while most of the major card networks are in the process of abandoning signatures, that doesn’t mean you’ll automatically be asked to key in a PIN instead.

However, even if chip and PIN cards aren’t the standard in the U.S., there are still some reasons it might be good to have one.

See related: Will dynamic CVVs become the ultimate in credit card security?

What is a PIN?

A personal identification number, or PIN, is a code that is used to verify your identity. Issuers of debit and other payment cards use PINs as a means to ensure that financial transactions are being made by the person who is authorized to make them. Like a password, a PIN gives a card user access to his or her account.

Do credit cards have PINs?

Some credit cards that have microchips embedded with data assign a PIN or four-digit code that serves as a way to verify card ownership and complete a transaction. You may be assigned a PIN or you may be able to choose your own.

While chip-embedded cards are relatively new in the U.S., much of Europe and Asia began rolling them out over a decade ago as part of an effort to fight fraud. Asking a customer to punch in a PIN adds an additional layer of security by making it harder for a thief to steal a physical card and use it in a store.

In America, lost and stolen cards make up a very small proportion of overall fraud, says Julie Conroy, research director at financial industry consultant Aite Group, and issuers didn’t want to make it harder for customers to use their cards by having to remember PINs. So they elected to issue chip-and-signature cards.

But a card can have more than one “cardholder verification mode” (CVM), so some issuers add PIN capacity as a secondary mode.

Cards that are signature preferred but have a PIN as a secondary mode will still ask you to sign a receipt in most cases. But you would be asked to put in your PIN if you were at a terminal that couldn’t take a signature, perhaps overseas. Barclaycards, HSBC Mastercards and Bank of America cards are some examples of cards having dual CVMs.

However, only a few cards in the U.S., mostly issued by credit unions, have true PIN priority, which means consumers are asked to enter their PIN first in every transaction if that’s an option the merchant supports.

The most versatile cards also have what’s called an “offline PIN.” These cards actually store the PIN securely on the chip itself, so cardholder verification can occur even at a stand-alone kiosk not connected to a network. The technology was developed in other parts of the world where the telecommunications infrastructure wasn’t as robust as it is in the U.S.

If your card has an online PIN, the terminal must electronically contact the issuer over a network to verify that your PIN is correct every time you enter it.

Do you need a PIN to get a credit card cash advance?

There is one situation where a chip-and-PIN card might be particularly useful in the U.S.: when you’re trying to get a credit card cash advance from an ATM.

With your PIN, you can use your credit card in the same way that you would use your debit card. Simply enter your PIN and follow the instructions on the ATM to withdraw the cash.

Without a PIN, you could still get a cash advance, but you may have to take additional steps such as showing your credit card and identification to a bank teller.

See related: Contactless cards: ‘Whoa, it’s the future!’

Can a PIN add to my card’s security?

Your name can be forged when you have a chip-and-signature card. Also, cards without PINs can be more easily used for card-not-present transactions, such as online purchases.

The National Retail Federation (NRF) is just one of the organizations that have continued to push for widespread adoption of chip-and-PIN cards in the U.S. as a way to prevent the use of counterfeit cards and as a way to cut down on fraud when cards are lost or stolen.

In fact, according to the NRF, chip-and-signature cards and chip-only cards offer only half the security of chip-and-PIN cards.

How do I get a PIN for my card?

  • Different card issuers have different procedures. You may have already received a PIN with the initial information sent from your issuer about your credit card.
  • Contact your issuer or log into your online account to see if there are instructions on getting a PIN.
  • Some issuers, such as Capital One, may be able to send you instructions on setting a PIN up immediately via email or text.
  • Chase requires you to request a PIN via phone.
  • In some cases, you may have to wait for the PIN to arrive in the mail.

Signature-preferred cards that have PIN capacity

The following cards will spit out a signature slip, but they have secondary PIN capacity as well:

Barclaycard  

You will be assigned a PIN when you get your card, and you can customize it through the online banking portal. If you change your PIN, your first transaction must be an online transaction so the new PIN can be encrypted on the card. Several Barclaycards offer rewards along with no foreign transaction fees, including the AAdvantage Aviator Red World Elite Mastercard.

Bank of America 

You can request your PIN by signing into online banking or calling the number on the back of the card, said spokeswoman Betty Riess.

Though all Bank of America cards have PIN capacity, the Bank of America® Travel Rewards credit card* is your best bet if you’re a frequent traveler because it has no foreign transaction fee. It also offers a decent signup bonus, plus 1.5 points for every dollar spent.

PenFed Credit Union

A random PIN is assigned and mailed separately, or you can call customer service to customize your PIN. Various cards are available with different types of rewards and no foreign transaction fees. There is no annual fee if you meet certain criteria.

Navy Federal Credit Union 

If you’re eligible to join the Navy Federal Credit Union (Department of Defense employees, service members, veterans or their family members), you can add PIN capacity to any of its cards, according to the Navy Federal website. Navy Federal cards have no foreign transactions fees.

See related: How do credit cards work?

True chip-and-PIN cards with PIN priority

If you will be traveling in a country with few tourists or using your card at a lot of gas stations, toll booths, parking garages and remote train stations, you may want a PIN priority card. Here are some credit cards with true PIN priority. They all have offline PINs.

First Tech Credit Union cards

Even if you don’t meet First Tech’s membership criteria, you can still join by calling the credit union or visiting one of its branches. Its Odyssey Rewards World Elite Mastercard has no foreign transaction fees and rewards based on how much you travel. It has a $75 annual fee that’s waived the first year.

Andrews Federal Credit Union Visa Platinum Rewards card

To be eligible, become a member of the American Consumer Council ($8 annual membership or a one-time $15 lifetime fee) and deposit at least $5 in an account. Then specifically request a true PIN priority card, a spokeswoman said; otherwise, you get a signature preferred card with a PIN as a secondary verification mode. The Andrews Platinum Rewards card has no annual fee and no foreign transaction fees.

State Department Credit Union cards 

To be eligible, you or a family member must be employed by the U.S. Department of State or one of its affiliates, or you can join the American Consumer Council ($8 annual membership or a one-time $15 lifetime fee).

If you answer “yes” when the application asks if you live overseas or travel frequently, you will receive a credit card with PIN priority; if you answer no, signature will be the default. If you already have a card, call customer service to request PIN priority. The cards have no foreign transaction fees.

Diners Club Premier and Elite cards 

These cards are currently closed to new applicants. If you already have one, however, they are PIN priority and both carry no foreign transaction fees.  

United Nations Federal Credit Union (UNFCU) cards

To be eligible, join the United Nations Association of the United States of America for $25 and open a bank account. Some cardholders report a cumbersome application process, with a delay of several months after joining before they could apply for the card. The UNFCU Elite card has no foreign transaction fee.

Bottom line

For seamless foreign transactions, a true chip-and-PIN card with PIN priority is the way to go.

*All information about the Bank of America Travel Rewards card has been collected independently by CreditCards.com and has not been reviewed by the issuer. The card is no longer available through CreditCards.com.

Editorial Disclaimer

The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

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