New ‘smart’ credit card can handle info for several accounts

The average consumer currently has several credit cards in their name and may have difficulty keeping track of all the various features available on each. But now a new kind of card may help them clear up the confusion.

A startup known as Wallaby Financial recently unveiled a new type of credit card that can hold the payment information for multiple accounts, and gives consumers the benefit of linking certain purchases with the cards for which they would be most beneficial, according to a report from the tech news site Mashable. Essentially, the company is launching this technology as a sort of alternative to the type of digital wallet service that is now being pursued and pushed by a number of major companies, including credit card lenders, payment processors, Web giants, smartphone manufacturers, cellphone service providers, and retailers.

The way the card works is simple: Users send Wallaby the information for the various credit cards they carry, and receive a "smart" card a short while later, the report said. They can then use that card to make a purchase in lieu of all the others they may currently have in their wallets. An advanced algorithm determines exactly which of the connected accounts will be most beneficial, including personal preferences cardholders exhibit over time, the ability to maximize rewards points, and the like.

The service costs $50 per year, but Wallaby Financial founder and chief executive officer Matthew Goldman says that it expects users to save several times that amount over the course of the year as consumers get the most out of their various accounts, the report said. Goldman claims he got the idea for the catch-all smart card when he was working as a consultant and realized that he  missed out on 5 percent cash back on a fuel purchase because he didn't know a card in his wallet would grant him the benefit until after he paid.

Some things to keep in mind
Though consumers who get the new Wallaby card will likely gain a lot of convenience from using it as a payment option, they will still need to be aware that the $50 fee they pay for the service comes in addition to the fees and other charges they already face for using their existing credit cards, the report said. In addition, the new smart card will only work in conjunction with traditional credit cards issued by major lenders, and during the beta testing period that runs through the start of 2013, will not allow users to link store-branded cards.

The primary concern for Wallaby is that it is coming into direct competition with a number of mobile purchasing platforms that have gained considerable traction in recent months, the report said. But Goldman, and some other experts, notes that having multiple cards actually helps consumers keep their credit card balances under control. And while some mobile wallet programs will allow consumers to link more than one account, Goldman says that Wallaby's software will help cardholders avoid the guesswork that comes with trying to figure out exactly which account will be best to use.

And as for the likely push that will come from all the companies participating in the development of mobile wallet platforms, Goldman says he believes his company is well-positioned because of the considerable concerns Americans have with relation to this type of technology, the report said. More than a few studies have shown that while a lack of available smartphones capable of handling these types of purchases is seen as restrictive to adoption, the far larger worry among potential users is that the new systems won't be secure.

Of course, many experts have noted that mobile wallet technology is actually far more secure than traditional credit cards because of the ways in which these platforms encrypt an account's payment data, making it extremely difficult or even impossible to access when basic security measures are in place. At the same time, the magnetic strips featured on the back of nearly all credit cards ever issued in the U.S. are relatively easy to read and copy.

Consumers who want to do the most to protect their finances should not only keep close tabs on their credit card accounts, but also regularly order copies of their credit reports. Doing so will help them to identify any potentially unfair markings that may be taking a toll on their credit ratings. Fortunately, working with a credit repair law firm may help to clear up such issues and put borrowers back on the right track to building and maintaining strong credit scores.