Pins put paid to pens

Although most of us have had chip and pin cards for over a year now, we have still been able to sign for goods and services when using our credit or debit cards in shops and restaurants. However, reports suggest some retailers are already declining payments from people who do not know their pin and from February 14 they will all be able to do so. Remembering those all-important four digits will soon be crucial.

The technology behind the chip and pin system was introduced to reduce fraud and cut down on the card crime that costs banks hundreds of millions of pounds every year. Each card contains a microchip that stores data more securely than the magnetic strip and is therefore much harder to clone or skim. As well as reducing the chance of you having your own card used fraudulently, in the long run this should have other benefits for you, as the cost of fraud is ultimately passed on to consumers.

Using a pin is becoming the standard way to pay for purchases, and most of us are familiar with the concept. However, there are still some old cards around that can't be used in this way and when you use these you will continue to sign the payment slip in the normal way. When these cards expire they will be replaced with cards that use the new technology.

Numbers game
Before you begin to use a new card, make sure you change the number to one that only you know and which you will find easy to remember - you can do this at an ATM. Don't use your birth date, numbers such as 1234 or famous dates such as 1066.

If you enter the wrong pin three times in a row, the retailer's terminal will lock your number. This will happen even if you make the mistakes in three separate shops. You can unlock your pin in an ATM, but you need to know what it is. Your pin will be valid abroad and can be used for purchases and cash withdrawals, but you may not be able to unlock it at a foreign cash machine, so it's wise to make sure you take an alternative means of payment when you go on holiday.

If you have forgotten the number, call or write to your bank, which will send it to you by post, usually within three working days. Or have a look at your card provider's website. Egg, for example, allows cardholders to check their pin online, after going through certain security checks.

Even after February 14 you may still need to sign for some purchases - not all shops have updated their systems and chip and pin technology isn't used everywhere in the world. As a result cards will continue to have a signature strip on the back that you need to sign when they first arrive.

The exceptions
Most people will have to use chip and pin where a retailer has the technology, but if you have a disability and think you may have difficulties with the system you should contact your card provider and discuss your options with them. They may be prepared to let you continue signing for payments.

Not all transactions will require a pin - you will still be able to pay by cheque and using your card for verification without needing to provide your pin. And you won't need your pin for mail order, telephone, or internet purchases.

If a website or salesperson asks for your pin do not disclose it. And never send card details or pins in response to emails that appear to come from your bank, building society or card issuer. These organisations will never email you asking for personal details - instead these messages will have come from fraudsters engaging in what is known in the trade as "phishing".

Criminals have a real incentive to trick you into revealing your pin. This is because it is encrypted (held in a secure memory) within the chip, meaning that it is extremely difficult and time-consuming for a criminal to access the number if your card is stolen. In fact, they would probably destroy the card in the process. If you do think someone has found out what your number is you must contact your card issuer immediately to have a new pin issued or change it at a cash machine.

As always, when you are using your card to pay you should check you are clear about the payment you are authorising before you go through with it. The retailer's terminal will display the total amount - make sure it is right before you enter your pin and press enter. If you are in a restaurant you will have the option to use your card to leave a tip, so check the total amount of the transaction when it is displayed. In stores you will need to use your pin in a shop if you are asking for a refund.