Common questions on credit card numbers

If you’re like the average American, you carry at least three credit cards in your wallet. Here’s some commonly asked questions:

What are the new chips (on the front of the card) for? Preventing fraud. These embedded microprocessors encrypt your personal information making cards more difficult to counterfeit.

Why do merchants ask for my security code? Whether it’s a four-digit number on the front or a three-digit number on the back, this code was added for “not present” transactions, situations where the card cannot be read, like when you’re shopping online.

Why are the digits raised? It’s a holdover from the days when machines were used to capture the card information. Card issuers are starting to issue non-embossed cards with printed numbers.

excerpt from Money | the guide January 2013