Does a Magnetic Wallet Ruin Your Credit Cards?

Wallets may sound like a simple accessory. But the technology that goes into wallets can vary considerably. For example, some wallets and money clips use magnets to keep the wallet and its contents in place. There is this belief that magnetic wallets and magnetic money clips can demagnetize the strip, which in turn makes the strip of the card unusable. 

Thanks to the RFID chips that most cards have installed, strips are less necessary now than they were before. But you still do not want a magnet to render any part of your credit or debt card obsolete. So do these magnetic wallets affect whether or not your credit card operates properly?

Not Really

It is absolutely true that the strips on most credit cards utilize iron-based magnetic particles. The iron particles are what stores your credit card data, so when you swipe your card, a credit card reader reads the iron particles in order to process your transaction.

If you take a magnet to these particles, the particles scramble, and the data can no longer be read accurately. Should a powerful enough magnet come into contact with your credit card, it absolutely can demagnetize it, which in turn would make at least the strip of your card unusable (although the chip would still function properly). 

However, credit card companies lose millions of dollars a year replacing damaged cards, and so credit cards – at least modern day credit cards – are embedded into a plastic film that prevents the iron from being scrambled, and prevents the card from being demagnetized. It would require a powerful magnet, far more powerful than a magnetic wallet to de-magnetize the vast majority of credit and debit cards.

Why Has the Myth Persisted?

It’s not entirely clear why there is a belief that magnetic wallets can demagnify credit cards. But there are some likely reasons that many people share this belief. These include:

• Hotel Cards – Hotel cards may be shaped like credit cards and use a strip like credit cards, but they are very different. Hotel card strips use a much lower level magnetic coercivity and no plastic coating. This make them very susceptible to magnets – so much so that no only would magnetic wallets wipe out these hotel cards, but other credit cards often have a magnetic pull powerful enough to break them as well. Magnetic wallets are not recommended for those carrying hotel swipe cards. When a hotel card demagnetizes in a magnetic wallet, it is often easy to envision a scenario where a credit card does the same. 
• Magnetic Money Clip Damage – The magnets in magnetic wallets and magnetic money clips are unlikely to cause any damage to a credit card. But money clips do offer other risks. Typically, you have to slip your credit cards through the clasp in order to hold them in place. This friction – not the magnet, but the friction of placing the card through the magnet – can cause the strip to become damaged, which in turn would render it unusable. Magnet wallets, because they have soft pockets, do not typically carry this risk.
• Easy to Blame – Frequently, we do not know why a card becomes damaged or stops working. Because it is often a mystery, it becomes easy to blame something like a magnet in a wallet rather than shrug one’s shoulders and recognize that the actual cause may not be entirely clear. This is especially true if a card stops working fairly early on after receiving it.

Also, because it is technically true that a magnetic can cause a card’s strip to stop working – even though it is unlikely for your card to come into contact with that powerful of a magnet – that makes the statement of “a magnet in your wallet could demagnetize the credit card strip” technically true even if it was not literally true. 

Find the Right Wallet for Your Needs

Even though the magnets themselves are harmless to credit cards, money clips still can be. That is why it is always a good idea to find a wallet, rather than a money clip, to hold onto your credit cards and other wallet items. See our entire inventory at Allett to find the perfect wallet for your needs.