The 'chip and pin' system is now fully in force in the UK.

Although it is not yet in force in North America it is obviously 'in the works' which means that some credit cards do have the embedded chip.

Here is the problem.

If you have a credit card without the embedded chip it can be swiped as it is in North America and you simply sign the transaction slip. (If it is a stolen/fraudulent card the transaction is covered by the bank providing the signature has been checked).

However....

If your card does have a chip embedded (one of ours does) that card cannot be accepted unless you have the relevant pin - which of course you will not have because the system is not in place here. If the merchant swipes a card with an embedded chip - rather than using the new 'chip and pin' equipment - and the card is stolen/fraudulent then the merchant is responsible for the transaction; therefore merchants are reluctant to accept a transaction of this type. Our card was refused in London - not an issue for us as we had another card with no embedded chip.

You can read details about chip and pin here