Charge It!

  I have two credit cards total.  One I use most days and the other I save for traveling overseas because its the better choice. I use it to the point, I seldom write a check anymore because the credit card is much easier to use.

Credit cards in the form of courtesy cards or metal charge plates that allowed customers a chance to charge their purchases.  Mostly oil companies and department stores began offering these in 1920's. The drawback with these cards is they could only be used with the place that issued them.

In 1950, Frank McNamara started what we know today as a 'Credit Card'. He started the Diner's club card designed to be used at a variety of restaurants in New York City.  The idea was that he'd charge merchants a 7 % fee on everything they purchased.  His logic was that people with the card would spend more than those without and the fee was worth it.

This was the first card to be accepted by multiple merchants.  The cardboard card offered one monthly bill for all those meals eaten at different restaurants but it had to be paid in full at the end of each month. With in one year, 42,000 people used the card and by 1953, it was the first internationally accepted charge card.  In addition, a few other companies tried marketing this type of card.

In 1958, American Express, Carte Blanche and Bank of America issued cards but Bank of America offered the most innovative terms of all.  The Bank of America offered a revolving balance and their  first plastic card that could be used at more types of merchants than the Diner's card but was only good in California at first.  Bank of America introduced its card by mailing 60,000 already activated cards to residents in Fresno.  Unfortunately, this stunt lead cost the bank millions in fraud but they kept issuing them to others within California. 

By 1961, Bank of America began showing a profit.  Up until 1966, this card only worked in California but in that year, they licensed their card to other banks out of state so you could go elsewhere and still use the card.  In  the same year, 1966, a different group of California banks started the Interbank Card Association to help manage issuer merchant transfers. 

 in 1986, Sears added the Discover card which was different from other cards in that it offered a small rebate for every dollar sent using the card.  Eventually, Discover  acquired the Diner's club card.

As time went on the Bank of America card became Visa and the Interbank Card Association became Master Card, two of the major credit cards used in today's society.  Over time, protections and perks were added to attract customers.  In today's society, more and more people are using their smart phones to charge items instead of using a card.

Hope you enjoyed this short history of credit cards.  Let me know what you think, I'd love to hear.  Have a great day.