Got a new credit card in the mail? Here’s why

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This Wednesday, June 10, 2015 photo shows a chip credit card in Philadelphia. (AP Photo/Matt Rourke)

This Wednesday, June 10, 2015 photo shows a chip credit card in Philadelphia. (AP Photo/Matt Rourke)

By Kathryn Vasel

Banks have been sending out new chip-enabled credit cards that have to be inserted and held in a credit card reader to complete a transaction.

These new cards look similar to your old credit cards, but now have a small metallic chip on the front. Think of the chips — called EMV microchips — as mini computers. They hold your payment data, which is currently held on the magnetic stripe, and provide a unique code specific to each purchase.

Chip-enabled cards aren’t new, they’ve been around for more than 20 years and are common in many areas of the world. But they are more secure than magnetic-striped-only cards.

“The microprocessor adds additional security data to the transaction each time the card is [used],” explained Randy Vanderhoof, executive director of the Smart Card Alliance.

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