Have you ever stopped to look into the history of your credit card? Where did it originated from? How was this process of paying for your purchases designed? Would you think that the story of credit cards in fact began way back in the Eighteenth century?
From Encyclopedia Britannica:
“the use of credit cards originated in the United States during the 1920s, when individual firms, such as oil companies and hotel chains, began issuing them to customers.”
However, references to credit cards have been made as far back as 1890 in Europe. Early credit cards involved sales directly between the merchant offering the credit and credit card, and that merchant’s customer. Around 1938, companies started to accept each other’s cards. Today, credit cards allow you to make purchases with countless third parties.
The first bank card, named “Charg-It,” was introduced in 1946 by John Biggins, a banker in Brooklyn, according to MasterCard. When a customer used it for a purchase, the bill was forwarded to Biggins’ bank. The bank reimbursed the merchant and obtained payment from the customer.
Credit cards were not always been made of plastic. There have been credit tokens made from metal coins, metal plates, and celluloid, metal, fiber, paper, and now mostly plastic cards.
There are five leaders in the credit card industry today:
Computerization spurred a boom in the 1970s and ’80s, as did new methods of analyzing consumer data to unearth the most lucrative “revolvers,” those who often carry high balances but are unlikely to default. Critics say contracts today, with their ever shifting terms and complex legalese, have helped customers get into more debt than they bargained for.
In the US banks issued cards to anyone and everyone, often charging 24.99% interest (or higher, cash advances often collect 29.99%) and adding on an assortment of fees hidden in the fine print. This appears to be a good deal for the card holder, as the monthly payment is very low. Specifically, it was often 2% of the balance, an amount that would either have the card holder paying back their debt many times over or, in the worst cases, never paying it back at all. All this resulted that thirty years later the average American card holder owes $10,679 on their cards. About 80% of American families have at least one card. Combined they owe about a trillion dollars, but will pay back far, far more.
The U.S. Congress begin regulating the credit card industry by banning such practices as the mass mailing of active credit cards to those who had not requested them. But it still haven’t solved all the problems.
So if you are reading this and have a credit card, please, do a good thing for yourself and pay more than the monthly minimum.