Here’s Why Your New Credit Card Comes With A Shiny Chip On It

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Say goodbye to the swipe - and get ready to dip instead.

If you've gotten a new credit card in the mail recently, you've probably noticed a big difference: there is now a shiny little chip on the front of it.

That chip is part of a newer, more secure transaction system called EMV. The technology has been in use in other parts of the world for some time but the U.S. has been slow to adopt it.

Now, there is a deadline. Retailers have until October 1, 2015 to start accepting the new type of cards, which means when you use that little chip, your transaction is more secure. When you dip instead of swipe, a one time number is generated for the transaction, and the retailer never gets your actual credit card number. That means if hackers ever got a hold of transaction information, they get a bunch of useless numbers instead of a laundry list of credit card numbers.

There are two ways to use the chip cards - either with your signature, as usual, or with PIN. Many U.S. credit card issuers are sticking to the signature for now, but the PIN method is the most secure. You can call your credit card company to ask if they support a PIN for Chip transactions.

We talked to CreditCards.com’s senior analyst, Matt Schulz about the topic. Still  have more questions? Check here.