From 1 August, you'll no longer be able to use a credit card in Australia purely based on the signature: it will have to use a PIN (personal identification number) instead. Here's why this is changing and what you need to know.
Credit card picture from Shutterstock
So what's changing with my card? Currently, people paying with a credit card have the choice of using a PIN or signing for credit card purchases. If you pay with an EFTPOS card, you need to use a PIN number.
That will change come August, when PINs will become the primary form of authorisation for cards. You'll no longer be asked "PIN or signature?" when you make a purchase; you'll be expected to enter the PIN. The change isn't happening until then to ensure that EFTPOS/credit card readers can be updated.
But I've had a PIN for my credit card for years anyway . . . Indeed: it's because PINs are now so widely used that it's possible to make this change without expecting too much disruption.
What about payWave or PayPass? The one exception to the PIN rule: for purchases under $100 using a contactless system, the PIN isn't needed. (This is the same approach that's in place now — you trade off security for convenience.)
My card doesn't have a PIN, or I've forgotten it. Contact your bank/building society/credit union to set or reset it. Some institutions offer the ability to do this via online banking or over the phone. The PINwise site has links for this process for the major banks.
Is a PIN really more secure than a signature? Yes. If someone steals your card and it's only secured by your signature, they can easily practise it until it's easily replicated (assuming anyone even checks in the first place). If you don't know the PIN, the payment won't go through.
That doesn't mean a PIN is perfect. If you record it with something that you regularly carry with your card, then someone can still use it if they steal it. (Don't try the "conceal it in a phone number" trick, that's easy to crack). As ever, if you card is misplaced, notify your institution immediately.
What about visiting tourists with signature-only cards cards? In theory, tourists will still be able to authorise a payment using a signature if they have a credit card issued by an overseas provider. In reality, experience suggests a PIN is likely to be required in some circumstances, depending on the payment terminal and bank. (Similar rules have been in place in European countries for some time and signature -only Australian cards often can't be used there).
A side note for Australian tourists: some banks offer the option of using a PIN that's longer than the standard four digits. While this can be harder to guess, those numbers won't always work overseas, as some banking systems only accept four digits.
Lifehacker's weekly Loaded column looks at better ways to manage (and stop worrying about) your money.