Quiz: Do you know how a Credit Card's Magnetic Strip Works?

The magnetic strip is also referred to as the magstrip.

There are many tiny, iron-based magnets in the strip.

Each particle in the strip is only 20 millionths of an inch (50.8 millionths of centimeter) long, and each is a tiny magnet.

The first digit on the credit card number is the system number, and digits two through seven are you bank number; digits eight through 15 are your account number, and the last digit is a check digit.

The credit card strip functions similarly to a cassette tape. Instead of motors turning the tape of a cassette to read it, you swipe the card through a reader.

There are three tracks on the magstrip. Only tracks one and two are used when the card is swiped. The third track is not usually used by banks.

The magstrip includes your name, account number, credit card expiration date, a code for the country you live in and various additional data.

When your card is swiped, an acquirer is phoned via a modem to authenticate the card, using information read from the magstrip. An acquirer is an organization that collects payments from a bank's account holder and guarantees payment to the merchant.

If your magstrip is scratched, dirty or erased the ATM will not accept it.

A card's magstrip can be erased by exposure to magnets, as simple as the ones you stick on your refrigerator to the strong ones used department stores to remove security tags from clothing.