A big problem with your new credit cards

(CNN)Many people may not be aware, but come October 1, everyone in the United States will be issued new credit and debit cards by their bank or credit union, equipped with a "chip," to replace their existing cards.

The new "chip" cards are different because they generate a unique transaction code every time the card is used and helps protect consumer data from hackers.

Combined with a PIN number, this new technology has proven extremely effective in reducing fraud in Canada and Europe. Victories against card fraud seem to follow chip-and-PIN cards around the world. Since the United Kingdom made the widespread transition in 2004, retail fraud has fallen by 67%. Closer to home, Canadian debit card users saw a 55% drop in fraud last year.

But so far, the United States remains the only member of the Group of 20 that relies primarily on outdated magnetic-stripe cards, which were created in the 1960s and have been identified as a source of most U.S. data breaches.

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