Smart Credit Cards

A smart card, chip card, or integrated circuit card (ICC), is defined as any pocket-sized card with embedded integrated circuits which can process information. This implies that it can receive input which is processed - by way of the ICC applications - and delivered as an output. There are two broad categories of ICCs. Memory cards contain only non-volatile memory storage components, and perhaps some specific security logic.

Smart cards are much more popular in Europe than in the United States. In Europe, the health insurance and banking industries use smart cards extensively. Every German citizen has a smart card for health insurance. Even though smart cards have been around in their modern form for at least a decade, they are just starting to take off in the United States.

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A smart card is credit card-sized piece of plastic. It may even be a credit card. Most credit cards, driver’s licenses, ATM cards and other kinds of identification cards, have a magnetic stripe storing some information about the user. What makes a smart card different from any old piece of plastic and from magnetic-stripe cards is an embedded microchip.

The chips in these cards are capable of many kinds of transactions. For example, you could make purchases from your credit account, debit account or from a stored account value that’s reloadable. The enhanced memory and processing capacity of the smart card is many times that of traditional magnetic-stripe cards and can accommodate several different applications on a single card. It can also hold identification information, keep track of your participation in an affinity (loyalty) program or provide access to your office.

One potential big win is using smart cards for access control and other user/employee identification. We know that there are three basic ways to identify individuals: something a person knows, something a person has and something a person is combining two or three of these can increase security. A password plus a thumb scan, a photo ID and a cipher lock code or a badge plus a retinal scan, all offer better security than any one of these alone. Smart credit  cards can be used to implement one, two or three of these.

Build a good credit rating: Pay your credit card bills on time, stay well within your credit limits and be careful not to take on too much debt with too many cards and you’ll begin to establish an excellent record on your credit reports from all three credit reporting agencies. That information, in turn, is used to calculate your creditscore — a number that tells potential lenders how likely you are to repay your debt. Use your cards to boost your credit score and you’ll not only qualify for zero and low-interest rates on competing cards but you may also be eligible for a better deal on your mortgage and auto insurance.