The coolest credit card in America is American Express’ Blue. It looks cool: transparent with a blue hologram in the center. It offers cool terms: no annual fee and no interest for the first six months. And it comes with cool technology: A computer chip is embedded on the left side of the card. The chip makes Blue a “smart card” — and smart it is. The sliver of silicon is a 32K chip with the power of an early PC.

But even if you have Blue, you may still ask: What the heck does that chip do?

The answer: Mostly nothing. So few stores have smart- card readers that Blue relies on its magnetic strip for charges. For now, it is style over substance.

So too with smart cards in general. A smart card could be the ultimate secure ID — with a digitized version of your thumbprint, for instance, that could be read at store check-outs or hotel check-ins. A single card could be your AMEX, your Visa or MasterCard, and your driver’s license. But that’s a long way off.

So if the smart card doesn’t do much for customers, what does it do for AMEX? In a word: differentiation. Blue’s chip offers powerful functionality for AMEX — cracking young, tech-savvy customers.