When You Swipe Your Credit Card, Does it Take Just the Numbers?

The stripe on a credit card contains your account number plus other data like your name and the card's expiration date. This information is used in processing transactions when you swipe your card. In many places, swiping has been replaced with inserting a chip card into a payment terminal, which is considered more secure because the chips on the cards are harder to counterfeit than magnetic stripes.

That familiar magnetic stripe on the back of your credit or debit card actually contains multiple tracks of data. Track one generally contains your credit card account number, your name and the card's expiration date. Track two repeats your account number and expiration date, partially as a backup. Track three data varies from card to card.

When you swipe your card, the card reader takes your information from the magnetic stripe and uses it to complete the transaction. It generally sends the data to the merchant's bank, which checks with your bank to make sure the card is valid and able to complete the transaction.

Since all of the data is stored unencrypted on the card, is printed on the card and is also the same data used for online transactions, it is relatively easy to create a counterfeit credit card copying the information of someone else.

Many banks and credit card companies have issued cards with embedded chips on them which you insert into a card reader rather than swiping. The chips use a standard called EMV, which stands for Europay, Mastercard and Visa, the companies that developed the technology. It was developed as an anti-fraud mechanism.

Chip cards usually do still have the traditional stripes, but they also have a computer chip that contains secret data not stored elsewhere on the card. When you complete a transaction, the chip is able to effectively prove that it contains the right data without revealing what that data is. Every transaction generates a different stream of data, and the transactions are encrypted, meaning you can't simply observe chip card transactions or look at the card to create a counterfeit with a working chip.

In some countries, chip cards are commonly used in conjunction with a PIN for added security whether they're credit or debit cards, but that's less common for credit cards in the United States.

If you're traveling outside the United States, it can be useful to have a credit card with a PIN for use with machines that only accept cards with PINs. Some banks will issue you a PIN to use with your card upon request.