A Complete Guide on Magnetic Stripe Plastic Card

Are you still wondering why magnetic stripe cards are widely used to store information? Well, a plastic card with a magnetic stripe refers to a card embedded with magnetic technology. It allows a card reader to read the personal information while swiping through it. From the cardholder’s name and address to account number and account balances – everything can be included in the personal information. Accessing this information instantly can help in processing transactions quickly and accurately.

Since 1960, magnetic stripe cards are used in a wide variety of settings. So, without any further ado, let’s check out what exactly are these magnetic stripe cards and how they work.

What is a Magnetic Stripe Card?

In simple terms, a magnetic stripe plastic card is a card that contains a magnetic stripe to store important information. It is also referred to as swipe card or magstripe as they read information while swiping through a card reader. As already discussed, this information may include account numbers, security functions, identifying information, and other relevant data. 

This information can be instantly accessed if combined with a point of sale (POS) retail system, transaction processing computers, and data networks. Some of the common uses of magnetic stripe cards include:

  • Bank Debit cards
  • Bank Credit cards
  • ATM cards
  • Hotel key cards
  • Access cards
  • Gift cards
  • Loyalty cards
  • Membership cards

How do Swipe Cards Work?

The magstripe on the back of the plastic card with magnetic stripe comprises three horizontally stacked tracks made of tiny, iron-based magnetized particles. These tracks are called data tracks as they store personal information and security functions relevant to an account.

A magnetic current is imparted to the stripe whenever the card is swiped through a card reader. This allows the computer to read the information in binary code. Once the POS system receives the data through the network, it communicates the data either by approving or denying the transaction. 

What are some of the uses of Magnetic Stripe Cards? 

Here are some of the common uses of magnetic stripe cards.

Credit Cards

When a magnetic stripe credit card is swiped at a store, the information from the data track communicates with the point-of-sale machine and transaction-processing computers. This captures the information of the customer such as account number, cardholder’s name, and credit limit. If the customer’s credit limit meets the bracket and there are no holds on the account, the transaction will be approved and finally completed.

Gift Cards

A gift card holding a set amount of money is a perfect example of how a swipe card works. Perhaps you must be aware that while buying a gift card, the cashier always asks about the amount of money you would like to add to the gift card. Once you confirm the amount, they will enter it into the point-of-sale system and swipe the card. 

The gift card is encoded with the specified amount when it is swiped and attached to the card’s serial number. When the git card recipient swipes the card for use, the POS system reads the serial number and the specified amount, finally leading to the transaction.

What are the benefits of using magnetic stripe cards?

  • Durable – Plastic magstripe cards are durable, waterproof, and shake-proof, thus they can be re-encoded.
  • Reliable – Thoroughly tested for several years, magnetic stripe technology is extremely reliable.
  • Reusable – As magnetic stripe cards can be reused numerous times, they are usually embedded on materials such as credits cards, that constantly rely upon changing data.
  • Security – The encoded data on the magstripe card is in an unreadable form, thus protecting the security of the cardholder’s confidential information.


Hope this guide has helped you learn everything about magnetic stripe cards. Please note that the code embedded on a plastic card with a magnetic stripe can be altered even after manufacture through reprogramming. Also, these cards cost much lower than the other technology cards. 

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