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 A smart card looks and acts like a credit card
or debit card. Gift cards are examples of smart cards. When
you use debit cards, the amount of money you spend is taken from your
checking or savings account at your bank. When you buy a smart
card, you are actually putting your money ‘on’ the card. For
example: You go to the movies a LOT! You would like to be
able to buy your ticket, popcorn, and drink by having a card swiped
instead of hunting around for your cash all the time. You go to the
movie theatre and buy a gift card for $25.00. When you hand the
cashier your $25.00 for the card, she will swipe the card in her cash
register which will ‘talk’ to the chip in the card, telling it that it
is worth $25.00. The next time you go to the movies, you use it to
buy a $10.00 ticket. The card is swiped and the cash register
subtracts the money and tells the card it is now worth $15.00. You
go inside and buy a $5.00 bag of popcorn, and a $2.00 drink. (Going to
the movies sure is expensive, isn’t it?) When the card is swiped,
the $7.00 is subtracted and your card is now worth $8.00.
Some smart cards are refillable which means that you can add more money
to it when the card runs out. Keep your smart card safe. If
you lose it, anyone can use it until the money on it is gone.
There are all kinds of smart cards. Most smart cards like
this are store cards, bought as gifts, and can only be used in a certain
store. Some smart cards are bank cards like American Express, or
MasterCard. The advantage to bank cards is that they can be used just
about anywhere. The disadvantage is that they usually cost an extra fee
plus the money you want to put on it. When the economy is bad,
some store smart cards become worthless when the store goes out of
business.
People love smart cards because they make holiday gift
giving easier and they also make Internet shopping safer. Shopping on
the Internet with a debit or credit card is risky. There are people
that steal debit and credit card numbers when someone buys something on
the Internet. Then they use the numbers to take all the money out of
that person’s bank account. With credit cards, they buy a whole bunch
of really expensive stuff using the stolen number. The advantage to a
smart card is that there is a limit to what someone can take. If you
have $25.00 on the card, that would be all they could take. If they got
your debit card number, they could take every cent you saved in your
checking account. Smart cards are SMART!
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Spending
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