Some of the slimmest and most elegant bifold wallets now have embedded magnets, which allows them to serve as a money clip. Many of them also feature RFID-blocking plates, suggesting that they are intended to hold credit cards in addition to bills. While such wallets are stylish and functional—at least when it comes to securing bills—you might be wondering whether the magnets will ruin your credit cards. Innumerable articles and blog posts warn that this can happen, but is it true? Can wallet magnets scramble credit card data?
The short answer is ‘not usually.’ The magnets used in ordinary money clips are not strong enough to ruin a credit card. However, they can affect other, less resilient magnetic stripe cards.
Elsewhere, we’ve addressed whether you should use an RFID blocking wallet. This article will look at the arguments put forward against using a magnetic wallet and dispel the myths surrounding them.
The Case Against Magnetic Wallets
As you undoubtedly know, magnetic stripes—or ‘magstripes’ —have numerous applications. They are used on credit cards and gift cards, employee IDs, hotel room keys, library cards, customer loyalty program cards, prepaid phone cards, etc.
You may have heard that a magnet can ‘demagnetize’ a credit card’s magstripe. This is not generally true. The magnetic stripe on a credit card is made from a ferromagnetic material—that is, a material that independently retains its magnetic properties. Refrigerator magnets are also ferromagnetic. Magnetic stripes which are ferromagnetic won’t become unmagnetized by being exposed to an external magnet of ordinary strength. For most ferromagnets, high temperatures result in demagnetization, not proximity to another external magnet.
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How Magnetic Stripes Work
The properties and characteristics of magstripes are defined by a series of documents developed by the International Organization for Standardization (ISO) and the International Electrotechnical Commission (IEC). When developed in compliance with the ISO/IEC 7810 standards, magstripes are composed of a thin layer of ferromagnetic material, typically finely ground iron-oxide. This is mixed with a liquid plastic, which hardens into a thin film. This film is then laminated onto the surface of a plastic card and is coated with a transparent protective layer.
There are two kinds of magstripes: high coercivity and low coercivity stripes. A high coercivity stripe is more durable and can withstand years of use; it is encoded with a strong magnetic field. However, a low coercivity stripe is less durable, cheaper, and encoded with a weaker magnetic field. For this reason, low coercivity stripe cards are used for single- or minimal-use applications, such as prepaid phone cards and hotel room keys, which have to be regularly re-coded. High coercivity stripe cards are the standard for credit cards, IDs, and other cards intended for regular and long-term use.
If you’re old enough to remember audio cassettes and VHS tapes, you are probably familiar with the primary mechanism that allows a magnetic stripe to hold data. As in the case of those outdated technologies, the particles that constitute a magstripe are each an individual magnet with a binary polarity. The polarity or direction of magnetism of each magnetic particle can be reversed. The ability to alternate between two distinct states (for example, ‘on’ and ‘off’ or ‘1’ and ‘0’) is the basis of all computing programming. Hence, a series of tiny magnets, each of which can be changed from one state to another, becomes a simple medium for writing binary code. Moreover, since the polarity can be reversed, data can be wiped and rewritten.
In the case of magnetic stripes, the data is written by a powerful magnet known as a solenoid. An electronic reader receives the encoded binary data when the card is swiped.
Under what conditions can a magnet scramble magstripe data?
Under normal circumstances, neither a high coercivity nor a low coercivity magstripe will become ruined by exposure to a nearby magnet. For example, consider the flexible ‘business card’ magnets that companies and service providers hand out to customers. These are typically about as thick as card stock, and they are intended to be placed on your refrigerator for ease of reference. If you put one of these in your wallet, it won’t wipe the data from your credit cards; the intensity of these magnets is much too low and nowhere near as powerful as the solenoid used to write (or rewrite) data. However, extraordinarily intense magnets can scramble the data.
Scientists measure the intensity of a magnetic field in terms of units of gauss. K&J Magnetics, Inc. has tested the conditions under which an external magnet can wipe data on magstripes, and they report that it requires a magnet of 4000 gauss to scramble data on a high coercivity magstripe. However, low coercivity stripes can be scrambled with 300 gauss magnets.
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Neodymium: Most Potent Magnet
The most potent commercially available magnets are neodymium rare-earth magnets. They can come in various sizes, and even the smallest are many times stronger than traditional ceramic magnets of comparable size. The researchers at K&J Magnetics found that they could scramble the data on a high-coercivity magstripe by bringing a small neodymium magnet within 0.0625 inches or less of a credit card. For this reason, they recommend that manufacturers provide a minimum buffer of at least 0.0625 between a magnetic disk in a wallet and any credit cards that might be stored within it. Almost all well-known brands of magnetic wallets abide by these recommendations.
The case is different with low coercivity magstripes. As mentioned above, they can be written or wiped with much weaker magnets. Scrambling the data on a hotel key card or a cheap prepaid phone card is much easier since they usually do not have the more resilient high coercivity stripes. If you placed a low coercivity magstripe card in your pocket with a modestly intense magnet, it could result in the card data becoming unreadable. Indeed, if you wanted to wipe the data from such a card, you could run a neodymium magnet across the stripe.
While we didn’t delve too deeply into the underlying physics of magnetism, we have surveyed the basic composition and function of magstripes. This revealed that it is doubtful that a magnetic wallet will ruin your credit cards or other magstripe cards. All manufacturers of major brand wallets understand that magnets can, in principle, scramble magnetically encoded data. For this reason, they design their wallets using magnets with relatively low gauss ratings and use the wallet material (usually leather or thick fabric) to insulate the credit card slots from the embedded magnet. The point is that in addition to it being theoretically unlikely that a wallet magnet will ruin your credit card, precautions are taken in the production process to minimize the risk even further. This makes it extraordinarily unlikely that an embedded wallet magnet will scramble your credit card data.
I have used a magnetic wallet for over four years personally, and I have never encountered any problems. I’m also not very careful about where I place my cards in the wallet! Sometimes I put them in the outer slots intended to hold them, but I often slip them into the inner space near the magnet. I’d recommend being more cautious: utilize the slots designed for credit cards and only place bills directly near the magnet. This is especially important for cheap single-use cards, such as hotel room keys. Place them as far away from the magnetic clasps as possible.