Smart credit cards: markets in self-constraint

The bottom line is simple:

Researchers at the University of Pennsylvania have one-upped “smart” credit cards with embedded microchips: They’ve developed a technique that lets ordinary card users program in their own spending parameters…The technology could let employers better manage spending on corporate cards or permit parents to get teenage children emergency credit cards usable only at locations like car repair shops, hotels or pay phones.

Programmable credit cards could let cardholders limit expenditures, for instance, to $100 a day or to spending only on certain days or at certain establishments, Gunter said. The programmable card’s added layer of security could also help cut fraudulent online use of credit cards, which has grown into a significant problem for consumers and industry. The same technology could be used in cell phones that use a smart card, Gunter said, to provide owners with ways to regulate the use of the phone by others.

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