The History of Credit Cards
A Glimpse Into the History of Credit Cards
As hard as it may be to believe it today’s day and age, credit cards did not always exist. There was a time when you couldn’t just hand over a piece of plastic to the store clerk and have your purchase charged against your credit card account. So how did credit cards come to be and when were they introduced?
The First Credit Card
One of the very first credit cards appeared in the early 1950s. It was a plastic card issued by Franklin National Bank of New York. The card was issued to Franklin Bank loan customers whose credit qualified them for the card. This credit card could be used at participating merchants.
How It Was Used
The merchant would copy the account number off of the credit card and the bank would then credit the merchant for the amount of the sale. The customer would then pay the bank instead of paying the merchant, much like a loan.
Widespread Use
Shortly after the introduction of the first credit card, the credit card business started to develop like wildfire. American Express and Bank of America started getting in on the action, both developing their own credit cards. While American Express was mostly geared towards travel and entertainment, Bank of America was used more widely for common, everyday purchases.
Then in 1966, 14 banks in the United States formed the first credit card processing association called Interlink. Interlink gave banks the ability to exchange credit card transaction information. Then, in 1967, four banks formed the MasterCharge program, which was changed to MasterCard in 1979. Visa came about in 1976, as a spin off of Bank of America’s BankAmericard.
Continuous Evolvement
Since that time, credit card use and issuance has continued to evolve. Can you believe it’s only been about fifty years since the first credit card was introduced? Who knows what the next fifty years and beyond have in store for us?