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I have heard about "skimming". What is it?

Skimming is when the data on the magnetic stripe of a legitimate card is copied to a storage device and later encoded on another plastic with a magnetic stripe.  It has essentially duplicated legitimate card data that can be used by a criminal to make fraudulent purchases.  This can occur when a waiter takes your credit card to run it on their terminal or a skimming device can be installed on an unmanned gas pump or ATM machine.  Chip processing will greatly inhibit skimming.