Credit cards and chip and PIN.

moneyLost_2

(Posted after a conversation with a colleague about using their credit card in a ATM).

Call me a cynic, but I believe that other than fraud prevention, there is an additional reason the CC companies have been so quick to introduce chip and PIN.

As we all know, using an ATM with a credit card is a really bad idea. Not only are cash advances charged at a high APR, but they’re usually charged from the day you withdraw the money, rather than from your statement date.

Before Chip and PIN, I suspect many people wouldn’t know what their credit card PIN was. These days, you need to remember it in order to make a purchase. That means that it’s far more tempting than ever to get cash out on your credit card.

I’d be really interested to know if any figures are available which show the amount of cash advances prior to, and post the introduction of chip and PIN. If it’s not gone up by a higher percentage than general CC debt, I’ll eat my hat.

Does anyone know if it’s possible to ‘block’ cash advances on a credit card? If it isn’t, it should be!

A.

Bossyboots

While it is true that you will pay interest on cash withdrawals from day one, it is also the case that you are charged interest on purchases from the transaction date, not the statement date, if you do not pay off your account in full every month. Additionally, if you do pay your account off in full then the following month you lose the interest free period and purchases are charged from the transaction date regardless. You have to make full payments for two months running to get your interest free period back.

poppy_f1

i kinda agree, my parents never bothered to remember their pin no for there credit card as they had no intention of using it for cash advances.
when chip and pin was introduced they had to remember the pin no which for people wth less financial savy (you could say) is too much of a temptation to withdraw cash without realising the downsides

flowerofscotland

moneyLost wrote:

Call me a cynic, but I believe that other than fraud prevention, there is an additional reason the CC companies have been so quick to introduce chip and PIN.

Does anyone know if it’s possible to ‘block’ cash advances on a credit card? If it isn’t, it should be!

A.

I agree it should be possible to opt out of getting cash advances on credit cards - this would reduce the possibilities for fraud as well.

As another cynic I believe there is another reason why banks were so keen to move to chip and PIN - it shifts the responsibility for fraudulent transactions away from them and onto the "customer". Previously if your card was stolen or cloned it was easy to prove that your signature hadn't been used. Now if your card is used fraudulently the bank will insist that you have been careless with your pin number in some way even though we all know there are ways that pin numbers can be captured.

moneyLost_2

flowerofscotland wrote:

As another cynic I believe there is another reason why banks were so keen to move to chip and PIN - it shifts the responsibility for fraudulent transactions away from them and onto the "customer". Previously if your card was stolen or cloned it was easy to prove that your signature hadn't been used. Now if your card is used fraudulently the bank will insist that you have been careless with your pin number in some way even though we all know there are ways that pin numbers can be captured.

I've heard that argument before, but does anyone know if that's been the case? Does anyone know of a case where the bank didn't pay up because they believed the customer was careless with their PIN? Not that I doubt they'd do it if they could, but I haven't heard if it's happened yet.

Come to that, I know that CC fraud has fallen since C&P, but is the existing fraud only via internet/phone purchases (where the customer isn’t present), or is anyone aware of a case where the C&P system itself has been defrauded?

justruth

Along those lines, my card issuer has very kindly informed me that if I have forgotten my pin number then I can check it on the internet! Fortunately really then that I am only stoozing and have already cut the card up, ready to send back. It does scare me though, that my pin is accessible on the internet.

markmc999

I questioned this on another board, it would be GREAT if you could have 2 PIN's - one for cash and one for purchases. That way I could use pin x for normal use and PIN y for cash - means I'd never get confused over which card I was using (which has happened before!)

meerustar

I think the security behind the chip n pin is worse than the signature. If someone sees the pin you put in at a checkout and they steal your card they can draw from it straight away.

When you had to sign they could only 'try' and use it in the shops.

I think security has gone backwards in this case.