How Do Magnetic Credit Card Strips Work?

By Natalia, Lisa, and Aferdiva

$$ Introduction $$

Everyone likes money. Using a credit card is a simple, fast, and fun way to spend it. With using a credit card, you do not feel the guilt felt when handing a clerksman or the bank, etc. a stack of money. The magnetic strip on credit cards was first introduced to society in the late 1960's in London. It soon traveled to become a large factor in technology all around the world. Although many have doubted it, the magnetic strip has stayed a major form of transferring money for over 45 years. stated that the strip will be used for the next ten to twenty years.
Here we will explain how the magnetic strip of the credit card functions, and its importance in modern day technology.

General Information

The black strip on the back of your credit card is the magnetic strip, or sometimes called the magstripe. It is made up of tiny iron-based magnetic particles bound together in a resin, and each particle is a tiny bar magnet about 20 millionths of an inch long. The tiny bar magnets can be magnetized in either a north or south pole direction. The magstripe is very similar to a piece of cassette tape, but instead of using a motor, your hand substitutes the motor and provides the motion as you swipe your card through a reader.

external image CreditCard2.jpg

The credit card's signal amplitude depends on the density of the particles mentioned above. If there are more particles (more dense), there is a bigger signal amplitude. Amplitude, according to our textbook Physics:Principles and Problems, is defined as the maximum distance that the object moves from equilibrium.The signal amplitude is important because it gives the card a design. For example, let's say this card was a banking card. If the design is stronger, then it can be used at any financial terminal in the world.

Swiping and Authorizing The Card

After swiping your card, there is an EDS software that dials a stored phone number to connect to an organization that collects credit authentication, or an acquirer. This company checks your card for merchant ID, a valid card number, the expiration date, your credit card limit, and your card usage. After the acquirer validates this information, single dial-up transactions are processed at about 2,000 bits per second. Then direct internet attachment uses higher speeds via a system, where you enter a personal identification number, or your PIN number, using the keypad. The PIN number is not written anywhere on your card; it is encrypted in a database, like your bank's computer, or in a hidden code right on your card. Each track has a requirement for its density(bits per inch).

external image Credit-Card-Reader.jpg


The credit card's magnetic strip contains three tracks of data.

  • Track 1: contains information about the cardholder's account, like their name, cradit card number, card expiration date, and country code.Density=210 bits per inch. For consumer's use.
  • Track 2: Contains same information as Track 1. Density=75 bits per inch. For Bank's use.
  • Track 3: Holds all additional information. Density=210 bits per inch. Not very necessary because not standard to banks.


Here is a short video where we demonstrate how a credit card is used. Notice the simplicity of the process!


Through our research we found how a credit card functions by the magnetic strip on its back. This strip proves to be very helpful to many people in their everyday lives. These strips are most likely found one one's credit, debit, and ATM cards, but can also be found on things such as a boarding pass or parking tickets. The magnetic strip was invented a long time ago, but has proved to be very useful. On the other hand, other technologies have been created where the credit cards are worked through touch memory and bar codes. New technology has created credit cards that do not require any contact, therefore no magnetic stripe is necessary. Smart-chip technology allows the card to store additional information, such as the buyers credit card history. We really developed an understanding for the immense technology and thinking that goes into one simple action, such as swiping a credit card.