A Brief History of the Credit Card

The idea of the credit card was first introduced in a book titled “Looking Backward,” an 1887 novel by Edward Ballamy.

Charge cards, as they were first called, were originally used for buying gasoline during the 1920′s. Theses charge cards were printed on paper cards and were very easy to forge. This gave rise to the Charge Plate which was a small piece of metal and had the owners name and address printed on it as well as a small piece of card for the users signature. The Charge Plate emerged in the 1930′s and was usually kept at the store and only issued by the larger companies to their most regular customers.

Next came the Diners Club card. Founded in 1950 by Frank X. McMcNamara and Ralph Schneider, the Diners Club issued a card that allowed people to use it instead of various other cards. This card required you to pay the entire balance each month. Instead of being a credit card as we know it in 2009, it was like running a monthly tab which had to be paid at the end of the month.

In 1958 we were introduced to Carte Blanche and American Express. American Express led to the creation of a global credit card system. In 1958 the Visa system came into existence via Bank of Americas BankAmericard. MasterCard came into the world in 1966 and was first known as MasterCharge.

Credit card use rose in the United States because of the banking practices in place. Cross country travelers could take their credit cards with them on their journeys because they could not access their own banks immediately.

The U.K. was the first country to release the credit card in 1966. Other countries were not on board as the reliability and security of this system was in question and most people still preferred cash payments.

Credit cards are now being produced that have a microchip implanted to reduce fraud. Another type of credit card is the Affinity Card. This is a co-sponsored card by the issuer and an organization that carry certain features such as discounts or cash back.

These days every large company seems to have either its own card or its own version of VISA or Master Card. AAA, Insurance companies, non-profit organizations and many colleges now offer cards as well as department stores, hardware steores and just about every other type of business. It is a great way to garner customer dedication.

One of the more odd qualities of todays economy is that the more you use these cards and the more debt you accumulate , as long as you keep up your payments, the better your credit score will be. The better your credit score is the more likely you will be approved to go further into debt by qualifying for more cards, loans and mortgages.