Tag Archives: Card

Debunking 5 Secured Credit Card Myths

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When it comes to secured credit cards, many myths abound. From “they’re only for people with bad credit” to “they’re more expensive than unsecured cards”, you can’t always distinguish the truth from the lie. Worry not. I’m debunking the most common secured credit card myths.

1. Secured Cards are a Bad Credit Stigma

Think a secured card announces to the world that you have bad credit? Guess again. Most secured cards are indistinguishable from unsecured cards. Your card itself won’t say anything and your credit report won’t show the fact that your account is secured.

2. Secured Credit Cards Have High Interest Rates

Many people assume that secured cards are for people with bad credit, and as such they have a higher interest rate attached to them. This isn’t the case. A secured credit card is less of a risk to creditors because the credit line is backed by a bank account. Because of this, secured cards often have lower interest rates than many of the bad credit unsecured cards.

3. They’re For People with Bad Credit

If you think a secured credit card is only for people with bad credit, you can rethink that logic. Secured credit cards are for people from all walks of life. You don’t have to have bad credit to carry one. Many people with decent credit qualify for unsecured cards, but not the best ones. In these cases, a secured credit card can offer better terms and higher credit limits.

4. They’re Issued by Predatory Lenders

Secured credit cards, more often than not, are not issued by predatory lenders. The cards issued by predatory lenders have high interest rates and high annual fees and processing charges attached to them. While a secured credit card is likely to have an annual fee it will usually be reasonable (in the $50 range), as will the interest rate.

5. A Secured Card Is Like a Debit Card

This one couldn’t be further from the truth. Secured cards are connected indirectly to a bank account, but they work nothing like debit cards. Your secured credit card account will be reported to the three credit bureaus, helping you improve your credit rating. Debit cards don’t do this. And like unsecured cards, you must pay your secured credit card statements when they come in each month even though your security deposit is securing that line of credit.

So are secured cards the black sheep of the credit card family? Absolutely not. A secured credit card can be a valuable financial tool — it’s just a matter of differentiating the myths from the reality.

For more tips on secured credit cards, saving money and avoiding getting taken, check out CreditCardWhizKid.com, a website that specializes in providing credit card tips, advice and resources.

Smart Card

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A Smart Card or Integrated Circuit Card (ICC) is very small as any pocket-sized card with embedded integrated circuits which can process data. It can receive input which is processed by way of the Integrated Circuit Card applications and delivered as an output.

This Integrated Circuit may consist only of EEPROM in the case of a memory card, or it may also contain ROM, RAM and even a CPU.

Smart Cards have been designed with the look of a credit or debit card, but can function on at least three levels, credit – debit – personal information. Smart Cards include a microchip as the central processing unit, random access memory (RAM) and data storage of around 10MB.

Smart Card is a mini-computer without the display screen and keyboard. Smart cards contain an operating system just like personal computers. Smart cards can store and process information and are fully interactive. Advanced smart cards also contain a file structure with secret keys and encryption algorithms. Due to the encrypted file system, data can be stored in separated files with full security.

 

Smart cards typically hold 2,000 to 8,000 electronic bytes of data. Due to those bytes can be electronically coded; the effective storage capacity of each card is significantly increased. Magnetic stripe cards, such as those issued by banks and credit card companies, lack the security of microchips but remain inexpensive due to their status as a single purpose card. Smart cards can be a carrier of multiple records for multiple purposes. The distributed processing possible with smart cards reduces the need for ever-larger mainframe computers and the expense of local and long-distance phone circuits required to maintain an on-line connection to a central computer.

 

Smart Card Usage

 

Computer security: – The Mozilla Firefox web browser can use smart cards to store certificates for use in secure web browsing.

Some disk encryption systems, such as FreeOTFE (On The Fly Encryption), can use Smart Cards to securely hold encryption keys.

Smart Cards are also used for single sign-on to log on to computers

 

Financial: – Smart Cards include their use as credit or ATM cards, in a fuel card, SIMs for mobile phones, authorization cards for pay television, pre-pay utilities in household, high-security identification and access-control cards, and public transport and public phone payment cards.

 

Identification: – A quickly growing application is in digital identification cards. In this application, the cards are used for authentication of identity. The smart card will store an encrypted digital certificate issued from the PKI (public key infrastructure) along with any other relevant or needed information about the card holder.

 

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