Credit Card Numbers – What Do They Mean? A Look at What’s Inside Your Credit Card

By ClearpointApril 11th, 2013Managing Credit and Debt

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You probably use a credit card or debit card on a daily basis. Most of your purchases probably involve card readers, or maybe you enter your account information manually while shopping online. Either way, there is a lot of information inside your credit card. Do you know what’s inside the numbers of your credit card? How about the magnetic stripe on the back of a credit card—ever wonder how it works? Let’s take a look.

Credit Card Numbers: What do they mean?

A system known as ANSI Standard X4.13-1983 is used by most major credit cards. Each credit card number tells a story about the card: who issued it, the type of account, etc. Compared to the magnetic strip on the back of a card, this isn’t much information, but it’s still useful. Here’s how to decode credit card numbers:

Let’s say your credit card number is 4385822056110982.

The first digit, in this case a “4,” signifies the system being used.

First Digit on a Credit Card and the System Used:

3 – travel/entertainment cards. In this case, different issuers can be identified by the second number on the credit card. For example: American Express (37), Diners Club (38), and Carte Blanche (38).
4 – Visa
5 – MasterCard
6 – Discover Card

Based on this information, you now know that our sample credit card is a Visa. What about the rest of the credit card digits? What can we learn from them? That information, referred to as the structure, is determined by the system being used.

Card Structure for Major Credit Card Issuers:

• American Express – Digits three and four are type and currency, digits five through 11 represent the account number, digits 12 through 14 make up the card number within the account, and digit 15 is a check digit. A check digit is essentially used for verification and is yielded from and paired with the algorithm that produces the other card numbers.
• Visa – Digits two through six make up the bank number, digits seven through 12 or seven through 15 (in some cases) represent the account number, and digit 13 or 16 is a check digit.
• MasterCard – Digits two and three, two through four, two through five, or two through six make up the bank number (depending on whether digit two is a 1, 2, 3 or other). The digits after the bank number, up through digit 15, represent the account number, and digit 16 is a check digit.

In our example card, the bank number is “38582,” the account number is “205611,” and the digits “0982” are considered the “check digits.”

What’s Inside the Magnetic Stripe on a Credit Card?

It gets even more interesting when you examine the data components of a magnetic strip. Surprisingly, it’s not as straightforward as people assume, and works more like one of those old 8 track tape players in the way that the data is accessed. In this case, three tracks are built into the magnetic strip, but only two of these are really “used” when processing information. Smart card chip technology is about to replace this system, although some “hybrid” smart cards still include magnetic stripes. Now that magnetic stripes are becoming a “thing of the past,” we can be amused by the irony that originally, magnetic stripes were a high-tech solution to a low-tech transaction processing problem.

Now that you know a little more about “what’s inside” your credit card, and what credit card numbers mean, use your card responsibly. Follow our tips for healthy budgeting and wise credit use. If you run into any trouble or have issues with debt, consider contacting a nonprofit credit counselor.