History of Credit Cards
Credit is over 3000 years old!
Credit Card History
Credit was first used in Assyria, Babylon and Egypt 3000 years ago. The bill of exchange - the forerunner of banknotes - was established in the 14th century. Debts were settled by one-third cash and two-thirds bill of exchange. Paper money followed only in the 17th century.
Christopher Thornton, who offered furniture that could be paid off weekly, placed the first advertisement for credit in 1730.
From the 18th century until the early part of the 20th, tallymen sold clothes in return for small weekly payments. They kept a record or “tally” of what people had bought on a wooden stick - one side of the stick marked with notches to represent the amount of debt, and the other side was a record of payments. In the 1920s, a shopper's plate - a "buy now, pay later" system - was introduced in the USA, but it could only be used in the shops which issued it.
In 1951, Diners Club issued the first credit card (invented by Diners Club founder Frank McNamara) to 200 customers who used it to settle their bills at 27 selected restaurants in New York. The concept soon caught on with travelling salesmen and, by the end of the year, 20,000 people were using the Diners Club credit card – and making the company a second year profit of $60,000. McNamara, though, thought that the concept was just a fad and, in 1952, he sold his shares in the company to his two partners for about $200,000! How wrong could he be…
The Diners Club credit card continued to grow in popularity and, in 1958, American Express and the Bank Americard (later called VISA) were launched in competition. As the idea of a universal credit card took root and spread across the world, by the early 1960s more and more companies were offering credit cards, often advertising them as a time-saving device rather than a form of credit.
However, with the establishment of standards for the magnetic strip in 1970, credit cards helped to forge the information age, in the process making American Express and MasterCard the massive success stories we know today. And with our lives now revolving around the use of credit cards, the rest, as they say, is history…
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