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EMV Credit Cards - The Difference between a Chip, Pin and Magnetic (Signature) Strip

Chip-and-PIN credit cards

Chip-and-PIN credit cards have integrated circuits—a microchip—embedded in the card itself. In a chip-and-PIN credit card transaction, the cashier or customer inserts the card into a compatible EMV card reader. The chip on the credit card generates a transaction code only eligible for a single transaction. You then enter your associated PIN to prove that you're the card holder. At this point, the purchase authorization completes and the transaction is considered valid.

Chip-and-signature credit cards

Chip-and-signature cards allow you to verify your identity with a signature and are the most popular method in the U.S. due to low cost and ease of use.  These cards have the same chip as the chip-and-PIN cards, but they don't use a PIN for identity verification. Instead, you provide a signature to prove your identity. Because it’s more difficult to replicate a PIN than a signature, chip-and-PIN cards are thought to be more secure than chip-and-signature cards.3

Magnetic strip credit cards

Magnetic strip credit cards make up the majority of credit cards in the U.S., but are quickly being replaced and updated due to an October 2015 deadline for EMV adoption which was created by major U.S. credit card issuers. 1 These credit cards use a magnetic strip containing the card's information, which is swiped through a card reader. Magnetic strips are easy to duplicate, which is why identity theft and credit card fraud numbers are elevated on these cards. You verify your identity with a signature instead of a PIN.

EMV adoption in the U.S. should decrease credit card fraud related to counterfeit magnetic strip cards, but perhaps not as dramatically as in Europe due to the use of signature instead of PIN. 2

Stay informed and be empowered with knowledge to guard against credit care fraud.

Additional Reading:

Smart Card Alliance: EMV FAQ


1 8 FAQs about EMV credit cards

2 That Big Security Fix for Credit Cards Won't Stop Fraud

3 NerdWallet’s Best EMV ‘Chip With Signature’ Credit Cards


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