From Valentines Day (14th February) 2006 a signature is not good enough for you to purchase goods in the UK using your debit or credit card. Chip and PIN technology has been around for years, but before now it has still been an option that you may sign for your card transaction. Now, however, that luxury has been taken away. No longer will a signature be enough proof that the card you are using is yours. If you own a debit or credit card you must now know your PIN number or else you won’t be able to use your card.
Card fraud is a big problem in the world nowadays, but this new technology has significantly decreased card fraud. It is estimated that 80% of retail transaction in the UK are now paid for by card. This isn’t because more and more people are getting credit cards, it’s because more and more people are getting a debit card with their bank account and using this debit card instead of cash when shopping.
Most new bank accounts nowadays offer free debit cards when you open your bank account. Barclays bank (one of the UK’s biggest banks), for instance give you a free debit card with their current account (http://www.barclays.co.uk/currentaccount-index ) and their new High Interest Savings Account (http://www.personal.barclays.co.uk/BRC1/jsp/brccontrol?task=articleFWgroup&value=2430&target=_self&site=pfs ). This card is a great benefit, as it means that you don’t have to carry cash around with you, and when crossed with an account that gives you a good interest rate, you can have a very beneficial addition to your purse or wallet.
For those of you that don’t already use a debit card; it is basically the same as your “hole in the wall” bank card, but also can be used like a credit card in stores when paying for your shopping. The good thing about the debit card is that it gives you access to your own money, without you having to get credit and get in to debt. Whenever there is no money in your account you can’t use your debit card this curbs your spending and thwarts your ability to spend more than you can afford.
The problem in the past with debit cards was that if you lost it someone could easily use it in a store with your forged signature, potentially giving them access to all of your funds. Now that chip and PIN has become compulsory it means that a thief cannot use your card in a store without knowing your PIN. This makes your card a lot more secure. The only thing remaining is to remember you PIN (Personal Identification Number) and not to write it down and store it anywhere near your debit card.
All information contained in this article, is for general information purposes only and should not be construed as advice under the Financial Services Act 1986.
You are strongly advised to take appropriate professional and legal advice before entering into any binding contracts.