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What Happens if Your Credit Card Chip Isn't Reading

credit card

Imagine that you are in such a great mood after landing a lucrative contract and you decide to treat your friends to food and drinks. The bill comes, so you dig into your wallet to fish out your credit card which you hand it over to the waitress. After a while, she comes back with the bad news that your credit card is not working. You are sure that you have not reached the limit on your credit card and realize that probably the chip has a problem. You politely ask your friends to chip in and promise to refund them. As you equip yourself with tips to save you such an embarrassment next time, here is all you need to know about chip cards.

How do Credit Card Chips Readers Work?

First came the magnetic stripe (magstripe) card then the chip card came along to make transactions more secure. Magstripe cards are prone to fraud because the payment information on the backside of the stripe remains the same, making it easy to be cloned. Chip cards, on the other hand, are dynamic in their encryption. Unfortunately, according to IDTech Products, chip cards are yet to gain popularity; therefore, credit cards have both a chip card and a magnetic stripe. A chip card uses a computer chip placed on the credit card to allow communication with terminals since it stores the customer's bank details. When dipped in the card reader the chip card and reader communicate in an encrypted language and with each transaction, a new code is created then data is encrypted and sent to the acquirer.

Before we advise you on what to do when your credit card chip is not reading, let's inform you of how you are contributing to the problem.

Heat, Water and Other Damage

According to EverythingWhat, leaving your credit card at the bottom of your purse puts it at risk of being scratched by sharp objects like car keys, resulting in a damaged chip. Even the tiniest scratch can make the chip unreadable. Sometimes even physical force can result in damage such as when it has been bent so much that it lost its chip holding capacity. Even carelessness such as splashing your card with water will result in damage. Heat can also damage your car; exposing it to extreme heat such as that emitted by dryers can bend the card, making it lose its shape and become unable to insert in the card reader.

Wear and Tear

Time has a way of reminding us to replace things as they age, and credit cards are not an exception. The more you use yours, the more the wear and tear to the chip, and eventually it will stop reading, making it useless.


As you wipe the surfaces of your phones and purse, remember that the credit cards get dirty. You can imagine the many times you have touched it with hands full of oil after a delicious meal. The buildup of grime will eventually render the credit card useless because even when you swipe the information on the chip cannot be read.

Magnetic Stripes Affected

We are guilty of storing our credit cards in wallets or purses that are most likely closed with a magnetic mechanism. While such an option helps to eliminate the headaches of zips getting caught in something, they do a lot of harm to the credit card over time. When the credit card is in the same magnetic field as the purse, the data stored in the chip is scrambled, making the credit card unreadable. It is not just the magnetic fields in your purse that affect the credit card chip. According to Discover, even the magnetic fields in an MRI machine or security sensor removal device will still alter the magnetic stripe making the card lose its ability to swipe.


The Silicon Underground advises that you should clean your credit card if you notice that it is not readable. The accumulated grime can be easily gotten rid of with simple dab of alcohol. The alcohol should be at least 90% so if you can get a much purer solution, the more effective it will be. Wipe the contacts on the chip with a cotton swab dipped in the alcohol. The blog adds that although it will not guarantee the chips reads forever, at least it will keep you going. Even if you can't get some alcohol, you can use nail polish remover, to remove the physical impurities. Alternatively, you can use an antibacterial wipe to clean up the grime then use an eraser to remove any remaining junk particles. If even after cleaning it still does not read, consider getting a replacement.

Store Properly

It would beat logic to clean the credit card chip only for you not to store it properly again. After cleaning, ensure that your card remains in tiptop condition by keeping it in a plastic photo holder in your wallet instead of throwing it at the bottom of your purse where it will be scratched by coins, keys and other sharp objects.

Are Chip Cards a Good Option For Business?

Regardless of the risk of them being damaged if not stored properly, chip cards have their advantages, especially in a business setting as Tidal Commerce enlightens us.

Fewer Chargebacks

A merchant without a chip card is viewed as a great risk therefore unless you are ready to part with a significant accumulated amount of chargebacks, it is better to switch to the chip card and be at peace knowing your business is better encrypted from fraudsters.

Better Reputation

Customers fear transacting with a business whose security is shady. With e-commerce having gained popularity over the years, the use of credit cards is the main mode of payment and chip cards are secure enough to build customer trust since they guarantee protection from fraud.

Allen Lee

Written by Allen Lee

Allen Lee is a Toronto-based freelance writer who studied business in school but has since turned to other pursuits. He spends more time than is perhaps wise with his eyes fixed on a screen either reading history books, keeping up with international news, or playing the latest releases on the Steam platform, which serve as the subject matter for much of his writing output. Currently, Lee is practicing the smidgen of Chinese that he picked up while visiting the Chinese mainland in hopes of someday being able to read certain historical texts in their original language.

Read more posts by Allen Lee

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