A chip is the squared metal piece on your credit card that can be read by card terminals. To store data in the cards, most credit cards use a magnetic stripe instead. Chips are getting more normal, because it is more difficult to modify ATMs and card terminals to retrieve data from them than it is with magnetic stripes. To pay with credit cards with chip you need a person PIN-code, which is four digits long. Because of this, cards with chips are sometimes just called “Chip-and-PIN”-card.
As you can see on the photo below how it looks like. It is the golden one on the left of the card in the picture, not the hologram on the right.
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