The chip and PIN credit card revolution is well under way in the United States, and the change is leaving many consumers wondering, "What's the big deal?"

The truth is, this new chip and PIN technology is a major upgrade for consumers, and we should all embrace the technology as a major step forward in fraud protection.

What are chip and PIN credit cards?
Chip and PIN credit cards, also called EMV cards, are cards that come with an embedded microchip on the card itself. You've probably started to see these tiny chips on many of your credit and debit cards already.

The embedded chip holds the unique identification information linked to the card, ending the need for the magnetic strip (though most cards today will continue shipping with a magnetic strip for legacy card readers). The chip on the card dynamically communicates with a chip-enabled card reader when you make a purchase, verifying your PIN and creating a unique code for each transaction in real time, all before approving a purchase. This new technology adds a layer of sophistication and verification to the transaction process, making your information more secure and harder to replicate.

The technology also ends the practice of using your signature to verify your identity when authorizing a transaction. Your signature, which is both easily forged and hardly checked by even the most attentive clerk, is replaced by your own PIN code, similar to the PIN process used for most debit card transactions today.

The combination of the embedded chip and the PIN requirement give chip and PIN credit cards major advantages over chipless, signature-based cards. Specifically, there are three primary benefits you should know about.

1. Chip and PIN credit cards are more expensive to steal and replicate
Thanks to the microchip on the card, these cards are significantly more difficult and expensive to counterfeit. Magnetic scanners are cheap and easy to use, and potential thieves can easily grab your card's information while you shop, swipe, or even just walk by a scanner.

You can't scan a microchip remotely, or even with a swipe or scan, especially one with the software onboard needed to sync up with the card reader to dynamically approve each unique transaction. With a magnetic strip card, that information can easily be pulled from your card, sent abroad to a criminal network, replicated, and used to steal your cash.

2. The chip and PIN transaction technology is more sophisticated and harder to defraud
With the older magnetic strip transaction, the card reader simply scans the magnetic strip, verifies that funds are available, and authorizes the transaction. The chip and PIN cards go a step further, syncing up with the card reader and payment network in real time to create a unique transaction number. If that element of the transaction fails -- due to a fraudulent card, for example -- the purchase won't be authorized.

That transaction code is never used again, making it that much more difficult for fraudsters to counterfeit your card and steal your money.

This dynamic verification happens in a matter of seconds, creating no inconvenience to you as you check out at the grocery store, gas station, or store.

3. Chip and PIN cards help reduce the damage of major data breaches at retailers and third parties
While chip and PIN cards can't fully protect your data in the event that a hacker is able to breach the security system of a major retailer, the extra layers in the transaction process -- the PIN verification on the chip, the unique transaction number, and the dynamic card identification between the chip and the card reader -- make it that much harder for hackers to put stolen data to use.

For example, the PIN number entered into the card reader is verified by the embedded chip on the card. For hackers to acquire useful data, they must capture both the chip's data as well as the PIN entered into the card reader. That's certainly possible -- cybercriminals are highly sophisticated -- but having these complex additional steps does make it more difficult for hackers to succeed in their attacks.

Put your new chip and PIN card to use to protect yourself as much as possible
Some U.S. credit cards with a chip don't come with a PIN, instead still requiring a signature to verify your identity. The argument from these companies is that the chip's primary purpose is to prevent counterfeiting, and the added benefit of using a PIN isn't worth forcing a change in consumer behavior.

If your card falls into this group, I'd recommend requesting a PIN from your credit card company anyway. It's not a difficult change, and it can save you a ton of hassle if your card is stolen. You're already using the PIN system with your existing debit card, after all.

And if all of this technical stuff makes your head spin, don't worry. You don't need to concern yourself with all the details. For you, the process of buying goods and services with your card is almost exactly the same. Insert your chip and PIN card into the card reader. Enter your PIN. Purchase approved.

All the technical stuff happens automatically, in the background without any extra work from you. Take advantage the extra protection a chip and PIN card affords you. These cards provide great benefits with no extra effort on your part.