Average Credit Card Debt By City & State

PlasticRewards presents an infographic of the average credit card debt by city and state. See where your city and state rank nationwide.

A recent trip to the airport caught my interest when an airline customer service agent told me I could just swipe my credit card in their kiosk to print a boarding pass and check baggage. I tried to explain that I was not the one who had actually booked the ticket and that my credit card would be of no use. However, the customer service agent reassured me that by inserting my card into the kiosk reader, the airline would be able to get the information they needed for my flight. This experience led me to investigate exactly what information is contained in the magnetic stripe found on the back of every credit card.

The structure of credit and debit cards that make purchasing everything from plane tickets to groceries so convenient is amazing when you think about it. The magnetic stripe is actually divided into three smaller stripes called “tracks.” These tracks, only 0.110′s  of an inch wide (2.79 mm), are encoded with the information needed for a card reader to allow a card holder to complete a transaction.

Because we are a global economy, the information contained in the magstripe of credit cards must conform to international standards. Afterall, I can fly to Canada or the Far East almost as easily as I can drive across the state in which I live, and I value the ease of being able to use a credit card to purchase souvenirs for my wife and kids without having to hassle with cash and exchange rates.

The standards for each of the three magnetic tracks were developed by different industries: Track one standards were developed by the airline industry; track two standards by the banking industry; and track three standards by the thrift/savings industry. For the most part, tracks one or two are the only tracks point of sale card readers are reading, and the only reason the card reader would read two tracks is for back up – in case one of the tracks has been damaged and is unreadable.

Tracks one and two store very similar information. Both tracks have “housekeeping” characters that indicate the beginning and ending of the sequence code as well as a character to indicate field separation. Both tracks one and two contain the primary account number, which usually (but not always) matches the number on the front of the card.  Both tracks also contain the expiration date of the card, possibly a country code,  and a three digit service code. This code communicates whether the card holder has international privileges or just national privileges, how the card issuer must be contacted for transaction approval, what service privileges the card holder has, and whether or not a PIN is required with those privileges. Service privileges might include the ability to purchase goods and services, to get a cash advance, or to use the card at an ATM. Both tracks one and two have a field for discretionary data, which can include such things as PIN Verification Value or Card Verification Code. Both tracks also have a longitudinal redundancy check, which is a code that verifies the input the card reader has scanned.

Minor differences between the information stored on track one and two include the fact that track one stores alphanumeric code and track two stores only numeric code. Because track one is the only track that allows alphabetical characters, it is the only track that contains the name of the card holder.

Track three is not currently used by any national bank card issuers. There is no standard for the data content and format. Although it doesn’t happen often, if a PIN is stored on a card, it will be found in track 3. Also found on track three can be a country code, currency units, amount authorized and other account restrictions, and possibly subsidiary account information. Some credit cards, those with a narrower magnetic stripe, do not even include track 3.

As I swiped my credit card at the kiosk, the card reader interpreted embedded code and communicated with the computer to verify the name on my reservation. Seconds later, the printer was delivering my boarding pass and baggage claim information. I was on my way. a It’s amazing to think that all because of a bunch of tiny iron-based magnetic particles on the back of my credit card, I could achieve like results standing at any kiosk at any airport in the world.

Want to give the best gift this Christmas season to that special someone? If so, then just pick up a gift card from their favorite retailer or give them cash. It’s true, our wife or girlfriend wants us to be sensitive and mindful of their needs and we can show them by giving cash or gift cards. My explanation stems from a discussion in a Microeconomics course I took in college and is rooted in simple economics.

We all possess an innate desire to maximize our utility or satisfaction in the goods or services we buy. That level of utility is limited by our amount of income, whether big or small. For simplicity’s sake, let’s say we have a choice between only clothing and jewelry we could buy. Women derive different levels of utility from each of the two different goods depending on their prices. We could choose to buy all of one good over the other, but that is highly unlikely because she will not obtain the most utility or satisfaction from us purchasing all clothing or jewelry. Subsequent units of one good may not bring us as much utility as the previous. As a result, we must purchase a combination of goods whose total utility exceeds that of purchasing all of one good. This results in all buyers optimizing their utility through a combination of goods available at their income level. One quantity of a good is substituted for another to obtain the person’s optimal level of utility.

By now you might be asking how this all fits into giving cash and gift cards as presents. It’s simple; similarly as people have income limitations on the combination of each good they can buy, we tend to set a dollar limit on how much we will spend on a gift for someone. We could be insensitive and choose what good or combination of goods to buy for our wife or girlfriend, but we’re certainly not like that. Instead, we get them a gift that allows them to maximize their utility or satisfaction. Your wife or girlfriend can then select the combination of goods that brings them the most utility with their cash or gift cards. You could even go along for the utility maximizing experience if you feel inclined to.

This type of gift giving is truly thoughtful and sensitive. You are thoughtful in that you really took the time to find the right gift that would best fulfill her needs so she could get the things she really wants, enabling her to maximize her utility. In fact, you should always give cash or gift cards for any gift giving occasion to anyone, that way they can maximize their own utility too. You’ll be the talk of all female social circles.

Earn something extra for yourself by using a cash back credit card, travel reward credit card or other reward credit card to purchase gift cards.