About a year and a half ago, the credit card industry issued new cards with chips to help cut down on fraud.

But a new study by the Javelin Strategy and Research firm, shows fraud rose 16 percent in the U.S. last year, most of it involving credit cards. Overseas, some countries have been using chip cards for 20 years, and it's dramatically cut down on fraud.

But our numbers are nowhere close.

The technology is pretty impressive: A computer chip which stores account data, and creates a unique code that can't be used for another transaction.

The chip technology makes our information way more difficult to counterfeit than those low-tech magnetic strips we used to rely on. And because of that, some credit card companies say fraud rates have gone down.

But "we found out", the way "we're" using them is not good enough.

"It was completely bungled the way we rolled it out. There was a rush to roll out this program for a false sense of security," says Lane Conner of Fuzse, a Credit Card Processing Company.

In order for the chip cards to really prevent fraud, we should be punching in a personal identification number, just like with our debit cards. Because a chip card with just your signature won't do anything to stop fraud if it's lost or stolen.

“The chip does thwart against duplication, but the bad guy can still dip and sign because the chip and pin is not rolled out,” said Conner.

Now the American Bankers Association says they haven't implemented PIN’s because they claim it won't prevent online fraud, which they see as a bigger problem. And because the chip cards alone have created problems in the stores.

"Organizations had a queuing problem where it was taking longer to conduct a transaction at the point of sale, and that was without the pin," said Doug Johnson of The American Bankers Association.

That's despite the fact the countries using chips and pins saw up to a 70% reduction in fraud.

But as long we keep using our plastic, at least the banks and credit card companies will be happy.

So when it comes to credit cards with chips, we can Verify, they don’t protect us as promised.

The American Bankers Association says it's working on even newer technology, where we won't have card numbers at all, but unique identifiers…whatever that's going to be. In the meantime, you still need to be very careful how and where you use your card.