The stripe on the back of a credit card is a magnetic stripe, often called a magstripe. The magstripe is made up of tiny iron-based magnetic particles in a plastic-like film. Each particle is really a very tiny bar magnet about 20 millionths of an inch long.
The magstripe can be "written" because the tiny bar magnets can be magnetized in either a north or south pole direction. The magstripe on the back of the card is very similar to a piece of cassette tape fastened to the back of a card. (See How Tape Recorders Work.)
Instead of motors moving the tape so it can be read, your hand provides the motion as you "swipe" a credit card through a reader or insert it in a reader at the gas station pump.
On the next page, see how information is stored in the mag stripe and read by different types of machines.