Credit cards are hanging tough after 50 years
By Jay MacDonald • Bankrate.com

This year marks the 50th anniversary of the little card that changed the world.

The first national charge card was actually made of cardboard. In 1950, Frank McNamara, president of Hamilton Credit Corp., came up with the idea as a way to pay for his meals in New York City restaurants. It caught on, and McNamara founded Diners Club. Within a year, he had 42,000 customers.

In 1958, American Express entered the market with a purple paper card to match its traveler's checks. That same year, Bank of America introduced its BankAmericard, which would eventually become Visa. (MasterCharge, which would evolve into MasterCard, didn't come along until 1966; Discover debuted in 1986.)

In 1959, AmEx introduced the first plastic card. A decade later, they changed the color to money green. In 1972, they were first to add the magnetic stripe to the back.

In 1983, MasterCard introduced the antifraud laser hologram.

Today, according to the Consumer Federation of America, an estimated 157 million Americans have at least one credit card; overall, there are about 1.5 billion in use nationwide.

Making cards tougher, smarter
As credit cards have evolved, so too have the worldwide standards under which they are manufactured.

In the beginning, there was polyvinyl chloride (PVC), a water-resistant, fireproof material made from 43 percent oil and 57 percent salt, invented in the mid-1920s. Because of its stability under heat, PVC continues to be the preferred (and cheapest) raw material for credit cards, which are created by laminating several thin layers together.

For years, the industry standard life expectancy of a PVC card was two years, according to Joe Naujokas, convenor of Working Group 1, Physical Characteristics of Magstripes and Embossing Test Methods, for the International Organization for Standardization (ISO).

In April 1996, the ISO updated its specs on the magstripe to make it more resistant to degaussing (erasure) from other magnetic sources, including magnetic money clips and magnetic-based security systems in retail stores. The change added an additional year to the life expectancy of PVC cards.

Different swipes for different types
But the ISO, which revisits its card standards every five years, has found that not everyone favors indestructible credit cards.

"Some of the credit card issuers (i.e., banks) are looking to try to extend card life to five years, which has card manufacturers worried," says Naujokas. "It put a big dent in their business when a lot of the issuers started going to three-year cards."

Little wonder: In 1998, a total of 6.7 billion cards were manufactured worldwide, according to the International Card Manufacturers Association.

One possible solution: separate manufacturing standards for two-, three- and five-year cards.

Part of the ISO's mission is to ensure that older card technologies, such as the embossed characters and magstripe, will coexist on the same card with newer technologies, such as smart chips and contactless radio transmission. ISO just completed its first standards for contactless cards (cards where you just run the card past a scanner, now most commonly used to open doors). The problem is, they are running out of data storage space on the magstripe.

To solve the issue, engineers are working to expand the magstripe's three data storage tracks to six, adding 1,000 bytes to carry biometric information, such as your fingerprints, hand geometry and other personal identifiers. The new specs will also include error correction on the magstripe, meaning that cards cut in half would remain valid. Biometrics are already being used on some passport credit card applications.

Card technology may be going high tech, but when it will reach the consumer market is anybody's guess.

"So far, bankers don't like the air interface of contactless cards," says Naujokas. "The challenge with biometrics is, everybody's got their own biometric standards out there. It is already being implemented in high-security industries, but when you'll see it in a mass market is unclear."

The problem with plastic
Then there is the lingering problem of pollution.

According to a study by the U.S. Environmental Protection Agency, plastics account for approximately 21 percent (by volume) of the nearly 200 million tons of municipal waste generated each year in the United States. In other parts of the world, the refuse of 50 years of non-biodegradable synthetics has outgrown available disposal sites.

Sure, charge cards are hardly the biggest problem. But the increased use of PVC cards for long-distance calling, retail refunds and other disposable purposes isn't helping matters either.

Professor Gerald Biby of the University of Nebraska may have found a homegrown way for Americans to have their card and eat it, too.

His solution: environmentally safe Mazin, a biodegradable polymer that looks and acts just like PVC but is made -- you guessed it -- from good old Nebraska corn.