Credit Cards - History
Have you ever stood behind someone in line at the store and watched him take out his wallet with at least 5 credit cards? Consumers with so many cards are now in the majority. Actually, almost all people hold at least one card. It’s true that credit cards have become important sources of recognition. If you want to rent a car, for example, you really need a major credit card. Moreover, a credit card can provide convenience and allow you to make purchases with nearly a month to pay for them before finance charges kick in.
According to Encyclopedia Britannica, the use of credit cards originated in the United States during the 1920s, when individual companies, such as hotel chains and oil corporations began issuing credit cards to their customers for purchases made at those businesses. After World War II, this use increased significantly.
In 1950, the first universal credit card (one that could be used at a variety of stores and businesses) was introduced by Diners Club. With this system, the credit-card company charged cardholders an annual fee and billed them on a monthly or yearly basis. In 1958, another major universal card was established: the American Express.
Later, the bank credit card system was introduced. Under this system, the bank credits the account of the merchant as sales slips are received and assembles charges to be billed to the cardholder at the end of the billing period. This means that merchants are paid quickly, something they like very much! The cardholder, in turn, pays the bank either the entire balance or in monthly installments with interest - sometimes called carrying charges. BankAmericard, was the first national bank plan and it was started in 1959 by the Bank of America in California. Starting in 1966, this system was licensed in other states, and was renamed Visa in 1976. Other major bank cards followed, including MasterCard, formerly Master Charge.
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May 29th, 2009 at 5:48 pm
I think the main reason people have so many cards, particularly in recent years, is because some are designed specifically for 0% balance transfers, others for 0% purchases, others for cheaper foreign transaction fees, others for loyalty gifts, etc, etc. Probably 0% transfer cards are the most common duplicates in people’s wallets as they shuffle debt around trying to avoid interest … But woe betide them if they use the wrong card for the wrong purpose as the charges really kick in then.
Cheers for your interesting post.