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What’s in a chip?

Many credit cards and U.S. passports have embedded chips, but they operate differently. Here are some details:

Credit cards

Until recently, most U.S. credit cards were issued with a magnetic stripe on the back, which contained your individual account information. Now, major credit card providers American Express, Visa, MasterCard and Discover are requiring financial institutions and retailers to switch to microchipped credit cards, which use encryption technology to protect the card’s data. The technology is known as EMV, for Europay, MasterCard and Visa, who created the global microchipped payment system.

Why? Widely used in more than 80 countries, credit cards with microchips are harder to counterfeit than magnetic stripe cards. Because the account information is encrypted, the cards are considered safer when used for point-of-sale payment transactions. The chip appears as a small square on the front of the credit card.

When: U.S. card issuers and retailers face an October 2015 deadline to have microchipped credit cards and readers in place. If not, stores and banks could be on the financial hook for fraudulent losses due to use of magnetic stripe cards. Ahead of the deadline, a number of major banks, like CitiBank, already offer microchipped cards to customers.

Passport books

As of summer 2007, all new U.S. passports carry a tiny RFID chip embedded in the front cover. Each chip contains the identical personal information found on the passport’s picture page, including a digital image of your photograph.

Why? The RFID chip is designed to help detect counterfeiting, deter terrorism and speed up customs, according to the federal Bureau of Consular Affairs.

How used: The passport’s RFID chip can be scanned by immigration officials using a close-range reader. Your RFID number and passport number will match up with data in Department of Homeland Security databases. Security features built into the card are intended to prevent random access to the RFID information. The passport’s cover also acts as a shield; when the booklet is closed, the chip typically can’t be read.

Passport cards

What they are: A simpler, less expensive version of a regular passport, these wallet-size cards are designed for crossing borders – by land or sea – into Mexico, Canada, Bermuda or the Caribbean. They cannot be used when flying into one of those countries or for any other international travel.

When: Introduced in 2008, more than 7 million passport cards have been issued to U.S. citizens. They typically cost $30, compared with $110 for a regular U.S. passport.

How used: Like a regular passport, passport cards contain an embedded RFID chip. However, unlike a traditional passport, the card’s RFID contains only an identification number linked to a “secure database,” maintained by the Department of Homeland Security. To prevent skimming, the cards are issued with a protective sleeve.