I am founder of a nonprofit Native American advocacy organization, SENAA International. As such, my computer is and has been the target of several "special interest" hackers who have attempted to nuke and otherwise hack this machine, both directly and via e-mail, as well as denial of service applications and other tactics. One particular "special interest" group, which I call the DP (Donut People), has gone so far as to reroute my Internet access to a bogus IP.
It was only through the use of firewalls (hardware and software) and the encryption of sensitive data that I have foiled attempts to gather information from my system.
Make no mistake about it. Although it may seem time consuming for a hacker to go through all the possible hiding places for credit card and usable personal info, any hacker worth his salt who has this as his or her goal will know the most likely places to find such information and will also look for text, Word, Excel, Access, and other files with names that suggest the presence of personal or financial information. Knowing the likely locations of such data and common tricks used by people to try to conceal such data, a good hacker will know exactly where to look and will be able to locate such information quickly. Passwords are important targets because they provide access to encrypted or password protected information that could be the victim's undoing.
Needless to say, I do not trust any application for storing passwords that resides on the hard drive. If there is reason to believe that someone might gain access to your home and your computer, it is very important to store passwords--and any sensitive data, for that matter, on removable storage devices, either on CD, DVD, floppy disk, or a jump, or "flash", drive.
I personally opt for flash drives. They plug into your PC's USB port, require no drivers for Windows 2000 and above, and can be slipped into one's pocket, purse, or in the case of Corsair's Flash Voyager, put on one's key ring or on a cord or chain and worn as a necklace underneath one's shirt or blouse. Flash drives come in memory sizes from 128 MB to 4 GB. Their size is approximately 3/4" wide, 1/4"-1/2" thick, and 3" long, and weigh approximately 1/4-1/2 ounce. Most flash drives come with a 10 year warranty. If you have a USB port, you can use a flash drive--and virtually every computer that is still functional has a USB port.
The flash drive is superior to, and is fast replacing the floppy drive. In fact, some of the newer computers do not have floppy drives.
I have had problems with floppy disks becoming corrupted. The reason is that the stylus that reads the floppy disk actually comes into contact with the disk, which is a mylar base with magnetic dust attached to it. It is the magnetic material that stores the information. Since the stylus is in contact with the disk, wear is constantly occurring, and in the case of a floppy disk, flaking will occur over time, degrading and eventually rendering unusable the floppy disk. Even with infrequent use, floppy disks will degrade over time. Magnetic materials are also subject to corrosion--rust--and to the moisture content of the air. Some of my older disks have some files that are unrecoverable, even though I have stored the disks well away from any magnetic fields, such as speakers and other electronic devices. Floppy disks are just not a good idea any more. Flash drives do not depend upon magnetic film for storage, so they are not as susceptable to damage as floppy drives. In the case of Corsair's Flash Voyager, the case and the protective cap are covered with rubber, so they are moisture resistant, which further protects the data it contains. Prices for flash drives range from $24 to right around $100, depending on manufacturer, retailer, and storage capacity, with the 1-4 GB drives being the most expensive. However, given their versatility, warranty, and portability, they are worth every cent.
I also use PGP (Pretty Good Privacy) to encrypt all data related to SENAA International, including the names and addresses of members and supporters. I keep both the public and private key, along with other sensitive data, stored on a flash drive on my key ring. The pass phrase for those keys, which is as hard to crack as I could possibly make it, is not stored on any electronic device or paper. It is committed to memory. Whenever I am away from my computer, all access to any SENAA related information--and much of the information itself--is also away from my computer. The only way for anyone to access those documents that are on the hard drive is to get my keys out of my pants pocket and somehow extract the pass phrase from my brain--and that won't happen.
What if I lose my key ring and the flash drive? I won't. In the impossible event that I did lose my key ring and the drive, anyone who found it and tried to access the information it contains would have to know my pass phrase, because the folder containing the information is encrypted as a self-extracting PGP file.
Whenever I have to modify or create documents containing hacker-usable information, I wipe the file from the hard drive using PGP after I have saved the file to the flash drive or to CD or DVD.
By using CDs, DVDs, and a flash drive, no hacker usable files are left on the hard drive.
I am not a representative of the company, but I recommend Corsair's Flash Voyager, which can be seen at http://www.corsairmemory.com. They are, in my book, one of the top-end flash drives.
A word of warning: when I last tried them, the PNY brand flash drives would not work on USB ports located on the front of the computer case. Most newer computers have USB, firewire, and sometimes digital camera memory card ports on the front of the case for easy access. PNY, for whatever reason, did not work well on front ports. Corsair and SanDisk flash drives work very well on front ports. In fact, they were built with the front port in mind for convenience's sake.
For those who do not have front USB ports, Corsair's Flash Voyager comes with a shielded (to keep signals inside the cable) 25" cable that is long enough to connect to the rear USB port and provide access from the front. Corsair also provides a mini CD containing a utility that can be used to encrypt the flash drive so its data can only be accessed from the user's computer using the user's access key.
So, the bottom line is that the absolutely safest method of storing and protecting your passwords so they are easily accessible is to use a flash drive and keep the drive with you.
The low-tech alternative is to buy a paper memo pad, write all your passwords in it, and keep that memo pad with you or in a different location from your computer until you need it.
That's my two-cents worth.
Al