JPMorgan Chase and American Express will soon be issuing millions of new credit cards. The new cards are embedded with a computer chip that will no longer require consumers to swipe their card and sign a receipt. Millions of credit card readers will be equipped with new technology that allows consumers to simply wave their credit card over the reader and the transaction is complete. The new credit cards and card readers have been tested in major cities and should be available nationwide by 2006.

The new "contactless" cards will be great news for merchants who install the updated card readers. The customer will move in and out of the checkout line quickly and the merchant will do nothing except issue a receipt. The new credit cards have sensors that will prevent thieves from retrieving confidential information about the consumer, which is encoded on the computer chip. A thief could use the credit card if it were stolen, but could not get any personal information about the cardholder.

While the new credit cards will be great news for merchants and credit card companies, consumers could be at a disadvantage. In cities in which the new technology has been tested, consumer spending and frequency of use has risen noticeably. Consumers spent more money with the new cards and used them more frequently than traditional credit cards. It is certain that all credit card issuers will soon follow in offering the new "contactless" credit cards.