What We Can Learn From The History of Credit Cards

The function of credit cards has existed a very long time ago, however it was not in the form of cards. It merely existed in the form of credit which is a way the buyer can purchase goods without having any cash in hand.

Back then, credit card took many forms which ranged from metal credit tokens, metal plates, paper, fiber and etc. Until recently, it only became plastic cards.

Credit cards are a real convenience when shopping because each of the card has a different number that identifies its owner. With just a swipe of the card, all the information of the owner will be transmitted into the database of the merchant. This saves both parties time and eases transaction for both buyer and merchant. At the same time, the credit card companies get their business too by charging a percentage of what the merchant earned.

The first official credit card was started by John Biggins of Flatbush National Bank of Brooklyn. The Charge It program was used by the merchants at that time. How it worked was by having the merchants deposit sales slips into the bank, the bank then records the data and charge the customer who used the credit card.

A few years after that, in 1950, The Diners Club credit card emerged. It started only as a card to pay restaurant bills. The card holder would be able to eat at the restaurant without bringing any cash. The restaurant would be payed by Diner’s Club and Diners Club would proceed to bill the cardholder. The Diners Club Card wasn’t technically a credit card since the amount had to be paid in full. Credit cards are different since you can only opt to pay a monthly minimum and take your time to finish paying the full amount.

In the early 60’s, traveling salesmen were sold credit cards because it was deemed a convenience for them. It was seen as a time-saving tool rather than a type of credit at that time.

In the 70’s, rulings of credit cards got so much tighter. The Congress started to regulate the credit card industry by eliminating the practice of sending credit cards to people who did not request for them in the first place.

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