The main difference between credit cards in the U.S. and other nations lies with their fraud prevention technology. U.S. credit cards store personal financial information on magnetic stripes. Upon being swiped at the point of sale, the information contained on this magnetic stripe is cross-checked against a database of known fraudulent credit card accounts and is subsequently either approved or denied.
Canadian, European and Japanese credit cards (among others) use chip-and-pin technology. This requires consumers to enter a Personal Identification Number (PIN) that must match information on a computer chip embedded within the card for a transaction to be approved.
Chip-and-pin credit cards are considered to be more secure than magnetic stripe cards. Cards with both a chip and a magnetic stripe, which is becoming the norm in the U.S., are somewhere in between.
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