The history of credit cards has evolved from coins to a small cardboard card to the plastic credit we use today. When credit cards were first introduced the consumer was required to pay the balance in full each month. However, the credit card has evolved into a revolving credit system. Under this system the consumer is not required to pay the balance in full every month. And although, this allows more people to obtain credit and purchase more items it is not always best for the consumer. Due to this system of revolving credit many consumers are in large amounts of credit card debt.
Charge Coins
One of the first instances of credit cards was charge coins. In an article from the American Credit Card Collectors Society, by Greg Tunks he mentions that the first charge coins were issues around 1865. Department stores or taxi companies gave these coins out to customers. Customers were able to present the coins to the merchant and the coin was stamped unto the receipt. The customer had to be able to guarantee payment when the bill came due. The store would also check the number on the coin and the name of the customer against their records to ensure that the records matched.
Diners Club Card
The Diner Club Card was created by Frank McNamara around 1950. It came about when McNamara forgot his wallet when he went to a restaurant in 1949. The following year he and his business partner Ralph Schneider returned to the diner with a small cardboard card. He used this card to pay for his dinner. The Diners Club card soon caught on and has grown into an internationally accepted credit card. But, unlike the modern-day credit card, members had to pay their bill in full each month.
Credit Card
An article by Forbes Advisor lists the chronology of the plastic credit card. The article notes that American Express launched its first credit card in approximately 1958. This card required customers to pay their bill in full each month and it had an annual fee. Around the same time Bank of America issued the first revolving card. Revolving credit means that the consumer does not have to pay the balance in full every month. This is the form of credit cards that we use today.
In conclusion, looking at the history of credit cards allows us to see how the way we used credit cards has changed over the years. Credit cards help the consumer to purchase goods and services without requiring physical cash. However, not all consumers are able to use credit cards responsibly. We have to look at the ways in which we use credit and whether we even need to use credit.