What You Actually Need to Know about EMV Chip Cards

You might have seen them in the news. Or maybe you know someone who has one. Or maybe you even heard about the impending “liability shift” . . . dun dun dun . . . Or maybe you haven’t ever heard of EMV Chip Cards until now. Whatever you have or haven’t heard, chip cards are the next big thing in financial technology. And in the next year or so, everyone will have one, including you! So here are the basics you need to know about what they are and how they work.

  • What is an EMV chip card? 

EMV stands for Europay Mastercard Visa. That acronym is pretty unhelpful, though, in terms of figuring out what the card does. What you really need to know is that EMV is a type of chip that will soon be embedded in all debit and credit cards. The chip encrypts your card information, like your card number, cardholder name, CVV2 (that 3 digit number on the back), and expiration date. When you insert a chip card a merchant’s terminal, instead of getting all that info off your card like they do with an old fashioned magstripe card, all the terminal gets is an encrypted code. The terminal never captures your personal info. Plus those encrypted codes are good for one-time use only, so they can’t be stolen and used again. So basically an EMV card is just like the card you have now, except smarter and more secure.

  • What’s the benefit of having a chip card?

It’s safer than your old card! Fraud is greatly decreased by the chip because of how it encrypts your information. So when you have a chip card you are less vulnerable to fraudulent charges on your account. Plus, a lot of other countries have already been using EMV chip technology for years, so chip cards are handy for those who travel abroad frequently.
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  • How do I use a chip card? Will I still be able to use my old card if I don’t have a chip card yet?

Using a chip card is super simple. When you’re at a chip terminal, you’ll stick your card into the bottom of it. The card will stay there while you process the transaction as usual. Then you remove your card and you’re on your way. Every chip card will still have a magstripe on it, so if you’re ever at a terminal that’s not chip-friendly, you’ll still be able to swipe your card the old fashioned way. Conversely, if you don’t have a chip card yet you can still swipe your magstripe card at a chip terminal. And best of all, if you have a shiny new chip card but you accidentally swipe it at a chip-enabled terminal, the terminal will remind you that you have a chip card and you need to insert it instead.

  • What’s this “liability shift” on October 1st all about?

This sounds a lot more ominous than it is, I promise. When it comes to debit and credit cards, liability is all about who is responsible for fraudulent transactions. The good news for consumers is that with or without a chip card, you’re never liable for transactions you didn’t do. So really, you can ignore the whole liability shift thing, and continue to use your card knowing you won’t be responsible for any fraudulent charges.

  • What about online transactions?

Chip cards only affect card-present transactions, or transactions where you are there in person to insert your chip card. Online transactions aren’t affected by chip cards, because you’re manually inputting your card info into the computer, not inserting a chip or swiping a magstripe. So you’ll process online transactions the same way you always do.

  • When will I get a chip card?

Probably soon! Again, there’s no rule stating that you have to have a chip card by a certain date. This means that financial institutions and credit card companies are issuing chip cards to their customers at their own pace. Chip cards and chip-enabled terminals are becoming more and more common around the US. You’ll see chip terminals at big chain stores like Wal-Mart, Target, and Hannaford. In response a lot of financial institutions are starting to issue chip cards to their customers. So be on the lookout for your new chip card soon, but in the meantime you can keep on swiping your old card with no worries.

5 Steps to Combining Finances

It’s September so you might have thought that the summer of wedding blogging was over . . . think again! Vows have been said, cakes cut, and dance floors dominated by my awesome moves but I have not run out of financial advice to give. I’m back in wedding mode to talk about one step of wedding preparation that’s not as glamorous as dress shopping or cake tasting, but is equally important – combining your finances.

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Money is a very personal subject for most people, which is why beyond determining who pays for dinner, a lot of couples avoid the subject. But your financial history, accounts balances, and spending habits strongly influence decisions you’ll make as a couple. Everything from big questions like where to live or if you want to have kids all the way down to the small stuff like what’s for dinner is impacted by your money habits; the sooner you start talking to your partner about your financial life, the better. So here are 5 steps to take to start combining finances with your spouse-to-be:

  1. Start Talking –  Set up a time and place to have the first money conversation. Give yourself at least an hour of uninterrupted time so you can talk in depth. It’s like a date but with bank statements instead of flowers. If you think it might be helpful, invite a third party like a counselor or a financial planner to help mediate. Money can be emotional, so there’s no shame in asking for some outside help. If things get heated, take a break and come back to it another day. The important thing is that you open lines of communication with each other so you can start approaching your finances as a team. You might be surprised by what you didn’t know about your partner’s financial life.
  2. Ask These Questions – There’s a lot to cover when it comes to money. Maybe you’re a financial guru who comes to the table with a laundry list of things to talk to your partner about. Or maybe you’re sitting there with no idea what to ask or how to start sharing. Never fear, Kelsey’s here . . . with a list of questions you’ll want to you ask each other during that first conversation:
    1. How much do you make?
    2. What debts do you have?
    3. What investments do you have?
    4. What financial institution(s) do you use? How many accounts do you have?
    5. Where does your money go each month? What bills, payments, etc. do you have?
    6. What are your financial priorities?
    7. What financial goals do you have? Short term and long term? As individuals and as a couple?
    8. What is your money style? Are you a saver or a spender? Do you have any money hang ups?
  3. Pick Your Style – You had your own money-style as a single person, but now you’ll have to determine what your style is as a couple. There’s no single best way to combine finances with your partner. It’s about figuring out what will work best for the two of you. Just remember that whatever money-management system you agree upon, your decisions will now affect not just you but your partner, as well. Here are some different ways couples commonly combine finances:
    1. What’s Mine Is Yours – Where you have one joint account and share everything.
    2. Yours, Mine, and Ours – Where you have a joint account for joint expenses (like rent, insurance, Netflix, etc.) but each maintain your own personal accounts for individual expenses. The trick to making this work is determining how much each partner will contribute to the joint account each month.
    3. A la Carte – Where you keep your finances separate but each partner picks certain joint bills and expenses to pay for.
    4. In Love as Individuals – Where you keep your finances completely separate.
  4. Ch-Ch-Ch-Changes – Getting married changes more than just your last name, although if you are changing your name you’ll want to be sure you do so on all important documents, credit cards, and accounts. You also might want to change the beneficiary on things like your retirement accounts or insurance policies to your spouse. Most married couples also chose to file their taxes jointly, which means you might also want to make some changes to your payroll with holdings. Additionally, once you open a joint account you might need to change things like your direct deposit, automatic withdrawals, or payments that are set up on your debit card. Be on the lookout for things that might need updating as you go along.
  5. Keep the Conversation Going – Now that you’ve got the ball rolling, don’t let it stop. Continue talking openly and frequently with your partner about your finances. Set up a time to meet once a month to go over your accounts. Look at where your money went last month, if you met your goals, and what’s coming up this month for bills. Make these dates fun by ordering takeout or making drinks. As you start a new life together, new money questions are bound to pop up. If you have an established system for talking about those new challenges, they’ll be so much easier to tackle together.

Europe on a Budget – Tips for Traveling on the Cheap

This August Casco FCU teller-to-the-stars Paige went on the adventure of a lifetime. She and a group of friends went on a trip to visit her German exchange student from high school. While abroad Paige got to travel all around Europe – to Iceland, Germany, Italy, France, and Austria. It was a month-long trip jam-packed with fun. Trust me, I’ve seen the photos.

Paige & Friends at Eiffel Tower

Paige & Friends at the Eiffel Tower.

Because she works at a credit union, Paige was very well prepared financially for her vacation. She might have been gallivanting around Europe, but that doesn’t mean her bank account was left hurting. And now Paige has returned from her trip with more than just fancy German chocolates to share – she sat down with me to give me her 7 best tips for saving money while traveling. Here they are:

  1. Get your home finances in order – Step number one when you travel (even within the U.S.) is to let your financial institution know where you’re going and the dates. Your credit union or bank has fraud prevention systems that track your debit card use for unusual transactions. If out of the blue you start using your card in Switzerland when you’ve never made a purchase outside of Maine before, those systems might think someone has stolen your card. Your debit card might get frozen and you might not be able to access your money right away, which isn’t a problem you”l want to have while traveling overseas. If you notify your FI beforehand, however, they can often modify settings on your card to make sure it works correctly while you travel. Step two of financial prep for your trip is to make sure all of your bills will get paid while you’re gone. Set up auto payments to insure things like car payments, credit cards, student loans, and your rent are taken care of while you’re gone. Then you won’t have to deal with late fees or other hassles when you get back.
  2. Save more than you need – Paige estimated that she would need between $1,000 to $1,500 for her trip. This was based on the fact that she would be gone for 4 weeks and some research she did into accommodations, transportation, and activities. She began putting money into a savings account for her trip over a year before she left and aimed to save $3,000. Knowing she had more money than she would necessarily need to spend meant she was ready for any unexpected expenses that popped up along the way (like a $25, 5 minute cab drive when it started raining in Paris). Plus it meant that she knew she had wiggle room in her budget for splurges like one fancy hotel room in France or some clothes shopping at Michael Kors. Lastly, saving money beforehand meant that even if she charged things on her credit card while she was there, she would have the funds to payoff that card when she returned. You want to enjoy your trip, not be worried about how much money you’re spending. The more you can save beforehand, the more enjoyable your trip will be.
  3. Get creative with lodging – Hotels can often be a traveler’s biggest expense. You gotta sleep somewhere, right? Paige saved money on lodging by exploring other options. She stayed with a friend from Germany for a lot of the trip. She also stayed in hostels, which are usually much cheaper than hotels because the accommodations are less fancy and you often share a room with other travelers. Paige recommends using websites like booking.com to check out a hostel before you book, just to make sure it’s safe and clean. Another option that can save travelers money is AirBnB, a site which lets you stay in someone’s apartment or home while they are gone.
  4. Buy tickets early – Most people know that often the earlier you can book a plane ticket, the cheaper it is. But the same goes for other traveling tickets, like trains, subways, museums, tourist attractions, and more. Paige, for example, got a $10 ticket to visit the Vatican online in advance. Tickets on site the day of are $42. That’s a big difference! The only downside to buying in advance is that if you don’t end up making it to that city or site, it can end up being a waste. So just make sure you don’t overbook.

    Paige Venice

    Paige took this herself in Venice. Look how cool the reflection on the boat is!

  5. Travel like the natives – Whichever mode of transportation is most popular with the natives of that city is probably also the cheapest. Instead of renting a car or flying, try alternative modes of transportation like trains, boats, and subway systems. Paige traveled from city to city in Europe mostly by train, because it was the cheapest. What was the most common way she got around once she was in a city? By foot! Walking not only saves on cab fares, but it lets you see more of the city up close and personal. Plus it’s free. Can’t beat that.
  6. Bring snacks – Food is expensive, but you gotta eat. Especially after a long day of sight-seeing. Obviously eating out can be a huge part of travel experience, but if you only eat out for your whole trip it can also be expensive. Try having at least one meal a day be “homemade” or rather something you buy at a grocery store and prepare on your own. If you’re going to be out for a long time sightseeing, bring snacks so you’re not tempted to buy food while you’re out. Plus bringing snacks means you get to check out foreign grocery stores, which will look a lot different than your local one. Who knows what yummy treats you’ll find for less.
  7. Keep track – This last one might seem obvious, but as she was climbing the Eiffel Tower I’m sure Paige was not thinking about her current checking account balance. It’s easy to lose track of how much you spend when you’re busy and having fun. But it’s also integral to making sure you stay within your budget. Use your mobile app to check your balance and recent transactions. Compare receipts to your app to make sure you got charged the correct amounts. Keep a list of what you’ve bought for gifts and souvenirs so you don’t overspend. Lastly, if you use a debit or credit card even once while abroad, checking your account online will help you prevent fraud on your account. If you see a transaction on your account that you didn’t do, let your financial institution know ASAP.

Although it sounds like if she had been able to Paige would have stayed in Europe forever, her return to reality has been a little easier because she’s in such great financial shape. She came back with money to spare, rather than being over budget or worried about how she was going to make credit card payments. That sounds like the right way to pay for Europe if you ask me!