Many people never heard of a paper shredder (also called a document shredder) until the infamous Watergate break-in scandal during the early 1970s. Today most people recognize the value of shredding personal and financial documents.

A toss of your curbed trashcan by an unscrupulous individual can reveal highly sensitive information, such as bank account numbers, balances, name-and-address, medical records with possible social security numbers, and receipts of all kinds. Armed with this information, an Internet-savvy bandit can potentially access your bank account, open new lines of credit, and do much more harm. This is called identity theft and is a growing problem costing taxpayers billions of dollars annually.

Because of the threat of highly sensitive information getting into the wrong hands, a paper shredder has become as common as a coffee pot on the kitchen counter, or a computer in the workplace. The small space the shredder takes up is a small price to pay to protect your personal information.

Paper shredders are available in three basic types: personal, for use at home; departmental, for small business or organization use; and corporate, which serves the needs of large companies.

A shredder also comes with one of three different styles of cutting methods. The style of cutting mechanism depends on how much security you require. The least secure cut is the single cut, which slices documents into long thin vertical strips. These strips can be reassembled with a little diligence.

More secure is the crosscut model; this shredding system slices paper into small confetti-like squares by cutting both lengthwise and crosswise. Normally this type of shredder will shred paper clips, staples and credit cards as well. Reassembling the shredded material is possible, but unlikely. This is a good mid-range shredder.

Most secure of all is the ultra-security cut, which provides a crosscut action that cuts the paper into minute, unreadable shreds. This type of shredder is an excellent choice for medical and financial institutions, government, and other entities with highly sensitive documents.

Inventor A.A. Low is credited with having designed the first paper shredder in 1908; but it wasn't until Adolf Ehinger came along in 1936 with his version that the device caught on. Fashioned after a pasta-making machine, Ehinger marketed his devise to government agencies and financial institutions and his company became a leading manufacturer of paper shredders. His company, EBA Maschinenfabrik, was the first to introduce the crosscut paper shredder in 1959 and it continued to thrive until the company was sold in 1998.

Purportedly, it was an EBA paper shredder that was used to destroy documents during the Watergate scandal. While Ehinger didn't invent the shredder, his improvement on the original had a huge impact on how we have handled paper since. Whether for personal or business purposes, it's a good idea to protect your sensitive information and guard against identity theft by using a paper shredder.