You may have recently received a new credit or debit card in the mail, with a new feature. Some new cards feature a microchip, also called an Europay, Mastercard, Visa (EMV) chip. Credit card chips are meant to make your card more secure. While most of the rest of the card using world switched over to the technology years ago, the US was slow to adopt it.

Even though the process has begun, as US News and World Report noted, it might take up to six years before three-quarters of card transactions in the United States are fully EMV compliant. Whether your credit card has a chip yet or not, here’s what you should know about the new system.

What EMV Chips Do

One big difference between credit card chips and the magnetic strip is the type of information each stores. The magnetic strip on traditional cards contains information that remains the same – your card number. If hackers break into a retailer’s payment processing system or point of sale system and are able to get information, such as card numbers, used by customers, the hackers can then produce phony duplicate cards and sell or use those cards.

When you use a card with a chip to pay for something in person, the card’s chip produces a unique code, which can only be used for that single transaction. A hacker can steal the code, but won’t be able to actually produce a working, phony card with the information, since the code is only valid once. If someone were to try to use a phony card hacked from an EMV chip card, the transaction would be declined.

Why the Switch?

Why has the US only just started the process of switching from magnetic strip cards to EMV chips? Part of the reason for that, as the Wall Street Journal reported, was because for many years, the US wasn’t a hotbed for credit card fraud. As other countries shifted to EMV technology, the US was left vulnerable. Notable credit card data breaches in recent years led the push to switch from magnetic strips to chips.

Cost of the Switch

The US was also slow to switch from magnetic strips to chips because of the sheer cost of the changeover. It’s cost retailers around $8 billion to upgrade their payment processing equipment to accept chip cards, according to Wired. Credit card companies have spent up to $8 million distributing new cards to consumers.

Do Chips Stop Fraud?

Credit card chips aren’t a perfect solution. While they will cut down on phony cards produced from data stolen from a point of sale system, they don’t reduce all types of fraud. Some chip cards feature “chip and PIN” technology, meaning each user is assigned a PIN that needs to be used with the card for it to work. So far in the US, though, the new chip cards are chip and signature, meaning you only have to sign at the end of a transaction. If someone steals your physical chip and signature card, he or she will able to use it, until you report it stolen. Chips won’t do much to reduce fraud when your card information is stolen online, either.

What if a Store Doesn’t Have a Chip Reader?

Although stores were supposed to switch over to chip technology by October of 2015, not every retailer has done so yet. The good news for you is that you can still use a chip at those stores. You simply swipe it as you did before it had a chip, as the magnetic strip is still on the card.

The bad news is for retailers. Companies that haven’t switched over yet assume the liability if there’s a data breach. Whether you swipe or dip your card, you’re still only responsible for up to $50 in the event of fraud, if you report it within 60 days. Retailers who haven’t switched might find themselves having to pay a considerable sum to make up for dragging their feet.

While the new cards do offer an additional layer of protection against fraud, you still want to be diligent about protecting your information and identity.

For more details, click here to read the full article, which originally appeared at www.mycvcu.org.