If your Direct Express card has expired or you got a replacement card because your card was lost or stolen, you will notice that there is a new direct express card with chip. This post will explain why your new card comes with chip and how to use it. We will also explain why chip technology is the future and what it means for fraud prevention and safety of your card.
Direct Express Card With Chip
The main purpose for banks moving to chip technology is to to offer added security against fraud. As you will probably notice, the new cards look like your old Direct Express debit card, with one exception: it comes with a small square metallic chip on the front. That chip is what holds your payment data. Previously, that payment data was stored on the magnetic stripe on your old card. The metallic chip is designed to reduce fraud, including counterfeiting.
How it Works
When you are ready to make a purchase in a store or make a payment in a store, instead of swiping your card, you’ll put it into a chip reader for a few seconds. (Most stores have added chip readers to their credit card terminals. If there is a chip reader, the cashier will instruct you to insert the chip). Then you might have to sign or enter a PIN. With each transaction, the chip generates a unique code needed for approval. The code is good only for that transaction. Because the security code is always changing, it’s much more difficult for someone to steal and use.
One thing you need to keep in mind is that how you use your card online and by phone will NOT change. That means chip cards won’t prevent crooks from using stolen card numbers to buy online or by phone. So it’s a good idea to still guard your card information closely, and check statements for suspicious activity.
The Rest of the World Has Moved to Chip Technology
A big part of the developed world is already using chip technology because it’s safer. The United States is just playing catch up. Here is a map showing you where chip technology is currently being used.
Questions and Concerns about cards with Chip Technology
There are a lot of misconceptions about chip technology. There are even claims out there that people can wirelessly scan your card information through the chip. Here is a quick video from famous Personal Finance guru, Dave Ramsey explaining what the chip technology is about. We hope this will help clear some of the false and misleading information out there about chip technology.
We hope this article was helpful in explaining how the direct express card with chip technology works. If you have additional questions, please let us know in the comments section below. If you have questions about card specific issues, call customer service.