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.

New credit card reform or the CARD Act of 2009, goes into effect on February 22, 2010. This legislation signed by President Obama, will serve to protect credit card consumers more than ever before and is the largest piece of legislation ever to be passed related specifically to credit cards.

But, how will it affect you if you are a college student?

In the past, credit card companies have aggressively marketed to college students, spending a great deal of marketing time and money towards students. Credit card companies target college students and convince them to get a credit card now…before they graduate. These companies often “sweetened” the deal with freebies and introductory 0% offers.

In the United States, the age of eighteen seems to be the magic number for young adults. It is the age at which teenagers officially become ‘adults.’ However, the CARD Act will add one more thing to the list of “can’t do’s” for young adults until they reach the age of 21. The new CARD Act will prohibit consumers under the age of 21 from obtaining a credit card.

Of course, there are a few exceptions. These exceptions are:

• If the consumer has a steady flow of income, they may be eligible to get a credit card.
• If the consumer has a responsible co-signer, they may be eligible to get a credit card.

Why?

Barbara Mikulski, a Senator from Maryland, says that the Act is in college students’ best interest. It is supposed to prohibit the old practices of credit card companies…to “weigh” students down with credit card debt before they even graduate.

The CARD Act will help protect college students from what is an ever-increasing amount of credit card debt. Rather than graduating with credit card debt, more college students will graduate with little or no credit history.

Here’s how you can work with the CARD Act to make sure that you can graduate with a credit history.

1. Get a job. It is possible to complete your college studies and have a job at the same time. Millions of students have done it and so can you; proving that you have adequate income to cover your credit card account.

2. Find a co-signer. Find a parent, guardian or spouse that is willing to co-sign with you. This gives you the opportunity to build your credit before you graduate.

It is extremely important for students to graduate with an established credit history. Having an established credit history or not can affect your ability to get a job, buy a home or car and even the rates you pay for insurance. The CARD Act has been established to help all consumers, so let it help you establish credit; even while finishing college.

See the average credit card debt by state along with other credit card facts. Click the image to see a full-size version.

For people with excellent credit, it is often difficult to find an exclusive credit card that rewards them something additional than most credit cards. With the arrival of Simmons First credit cards here at PlasticRewards.com, people with excellent credit don’t need to look any further. Simmons First offers two Visa credit cards for those with excellent credit.

Simmons First Visa® Platinum

This Platinum Visa from Simmons First features a low APR of 7.25% currently on purchases and balance transfers. If you do need to transfer a balance, there is an benefit that is hard to come by these days - no balance transfer fees. All balances must be transferred at the time of card application. Plus, there is no annual fee and with the Simmons First Visa Platinum you can enjoy platinum benefits like: global acceptance, travel insurance, emergency replacement and more.

Simmons First Visa® Platinum Rewards

This card was recently chosen as Money Magazine’s top travel rewards credit card. The Simmons First Visa Platinum Rewards offers one of the most versatile travel rewards program that allows cardholders to choose from airline tickets, hotels, cruises vacation packages and more. Every dollar you spend on purchase earns one point redeemable for travel rewards. The card also features a low APR, no balance transfer fees and platinum benefits; all with no annual fee.

Having excellent credit definitely has its rewards and the Simmons First Visa credit cards can help you get them.