Do You Really Understand The Make-Up Of Your Credit Cards?
Credit Cards: Anatomy 101
We look at our credit cards every day -- the 16 digit code, the 3-digit security code on the back, the magnetic stripe. But do we really know what makes our credit cards what they are? How do they work? Why are there 16 digits instead of 12? Here's a lesson in credit card anatomy...
The Number
Think your credit card number is just a random number that's linked up to your credit card account? Guess again! There are meanings behind that 16-digit code.
When looking at your credit card number, the first six digits indicate who issued the card to you and the very first digit says what kind of card it is. For instance, all Discover cards start with a 6 and all Visa cards start with a 4.
The Magnetic Stripe
That magnetic stripe is what stores swipe when you use your card but how, exactly, does it work? The stripe on your credit card contains your name and account details such as your card number and expiration date. When your card is swiped at the store, the information is taken so the store can process your credit card transaction.
Credit cards did not always have magnetic stripes. Those of us old enough to remember will recall when stores had to use carbons to make "rubbings" of the credit cards they processed. Not very secure, to say the least. Thanks to the magnetic stripes now found on credit cards, credit card transactions are much more secure.
Other Credit Card Anatomy Fundamentals
Other things you will see on all credit cards are the expiration date (the date through which the card can be used) and the service disclaimer. This disclaimer basically states that every time you use the card you are binding yourself to the terms and conditions of the card. That's why it's so important to stay up to date on your credit cards' ToS.
So there you have it, the fundamentals of the credit card anatomy. While knowing how to use your credit cards is of primary importance, understanding exactly what makes up a credit card is something all credit card holders should also be aware of.