Target's Redcard holders getting new credit cards and PINs

Target Redcard holders, choose your PINs.

Target Corp., the first major credit card issuer to opt for a chip-embedded card that requires users to enter a four-digit code instead a signature, is in the process of mailing out new Redcards.

After credit card holders receive their new Redcard, which includes a new account number, they will need to choose a personal identification number to activate it. Target began mailing the new cards with a gold or silver square on the front in August, and all cardholders are expected to have the new cards by spring.

"We felt it was important to offer the additional security," said Target spokeswoman Molly Snyder. Plans for additional credit card security were in place before the discounter's major credit card breach in 2013, Snyder said.

Credit and debit cards that require PINs are considered safer than the chip-embedded cards that require signatures, but many issuers are resisting them because consumers are weary of memorizing passwords.

If a credit card with a PIN is stolen or counterfeited, a thief can't use it without the PIN. The four-digit number is not included on the card and consumers are advised not to write their PIN there.

Losses from credit card fraud in the U.S. totaled $11 billion in 2014, up from $8 billion in 2012, according to a LexisNexis study. But in Britain and Canada, where chip and PIN technology is common, credit card fraud has been dramatically reduced. Canada reduced credit card fraud losses from $129 million in 2009 to $38 million in 2012, according to the Economist magazine.

All of Target's credit and debit cards and proprietary cards will be reissued with the new smart card technology, including the Visa credit card, which will be re-branded as MasterCard. It will still have a magnetic stripe on the back, allowing it to be used at any retailer. Target's proprietary debit and credit cards, which can only be used at Target, will no longer have a magnetic stripe.

Once cardholders get their new card, they should destroy the old one. All of the benefits with the old Redcards, such as the 5 percent discount and free online shipping, remain with the new cards.

Snyder said she was not aware of any negative feedback from customers on the PIN-enabled cards.

Cassie New, shopping at Target in downtown Minneapolis on Friday, said having to use a PIN is not a big deal for her. "It seems more secure to me, and I like being able to choose my own PIN," she said. "Otherwise, I'd never remember it."

John Ewoldt • 612-673-7633