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How did the credit card get introduced Credit cards are now accepted almost anywhere. It’s hard to imagine an economy in which people didn’t have credit cards, but of course, times were different before. In this overview, you’ll get a review of the history of the credit card. It should be an interesting read for anyone who’s ever wondered how the world has reached a point where customers can buy just about anything with their cards.
Researchers have discovered written examples of a credit system from ancient civilizations that were around thousands of years ago. Over the years, millions of people have presumably paid for goods or services on credit, settling their bills later.
In more modern times, stores started developing their own credit systems. Many set up accounts for customers so they could purchase items on credit. Some of these stores issued physical tokens that were presented during transactions, like special coins, medals, or metal plates.
Perhaps one of the earliest iterations of a credit card was Western Union’s idea of Metal Money, launched in 1914. With it, customers could push their payments back.
In 1946, a banker named John Biggins introduced the Charge-it card. According to SoFi, this was an important step related to when credit was invented, as these cards were usable within a two-block radius of Biggins’ bank” in New York City.
Diners Club Card
In 1950, the Diners Club card changed the way some people purchased items. After being unable to pay for dinner because he forgot his wallet, he was inspired to change the system. With his Diners Club card, customers would charge their meals to the card, and the restaurants would send the bill to the Diners Club. The Diners Club would pay the banks for the restaurants, taking a small commission for each transaction. At the end of the month, the cardholders would settle their bills with the Diners Club. The popularity of the Diners Club quickly grew, and more restaurants and even hotels joined the program, as did thousands of customers. This is an early success story in the history of credit cards.
Banks soon joined in and developed their own cards. In 1958, American Express made its first credit card. It was made out of cardboard, but it changed to a plastic card within a year. Bank of America also came up with a credit card in 1958. A few years down the road, in 1966, Bank of America came up with the BankAmericard, which could be used across the country. This significantly increased people’s purchasing power. Around the same time, a group of banks in California formed the Interbank Card Association. This association’s card was first called the Interbank card and later became known as Mastercard.
The idea of using credit has been around for thousands of years. The Diners Card is generally thought to be the first credit card, and fortunately, the industry has continued to innovate and make things easier for customers and business owners.