One of the nation’s largest credit card lenders recently decided to join the push among its competitors and begin issuing a new type of plastic to some of its more affluent customers, allowing them greater purchasing flexibility, security and availability both at home and when they travel overseas.
Bank of America will soon begin issuing credit cards that utilize both the magnetic strip seen on nearly all U.S. credit cards and the microchip-enabled EMV technology more popular in foreign countries, the lender recently announced. This is being done in an effort to increase the purchasing options for more affluent consumers who travel overseas regularly, because in many countries around the world, most smaller merchants and automated vending machines, such as ticket dispensers and gas pumps, are not equipped to accept magnetic strip cards any more. Most of Europe and Asia have been using chip technology for several years.
When consumers make a chip purchase, they authenticate it by signing for the transaction as they would with traditional credit cards, the report said. And because these new cards will have both the magnetic strip and chip capabilities, it can also be used with the growing number of American companies that now accept EMV payments.
However, the cards will only be available on select account types from this point forward, and will be extended to borrowers on existing accounts only if they have been identified as regular overseas travelers, the report said. Others may be able to receive the cards on an optional basis, and will be allowed to request them by phone starting this week, or online at some point later this year.
[Credit Cards: Research and compare credit cards at Credit.com.]
Studies have shown that chip credit cards are more secure in general than magnetic strip accounts because of the way the technologies protect the payment data they carry. On magnetic strips, the data is largely unencrypted, meaning that anyone with a credit card reader can access and even copy it. But on a chip card, which stores the card data on the computer chip, the technology is far more advanced and harder to access, let alone duplicate. This more significant security means that EMV cards are far less vulnerable when it comes to fraud.