Who Invented Credit Cards?

Credit cards are being used by so many people these days. While most of them take it for granted, some, like you, are interested in the history of credit cards. This article will give you some interesting details about the history of credit cards.



The concept of a credit card was first introduced by a person named John Biggins in Brooklyn, New York. He called it the charge-it program where the bank he worked for, Flatbush National Bank of Brooklyn, was able to charge their customers after merchants presented a sales slip on their account. Credit cards these days are made out of plastic whereas they were initially made out of various materials such as metal coins, metal plates, paper and even fiber. Nowadays, you will rarely see a credit card that is made out of anything other than plastic. An exception to this rule is the American Express "Black" credit card that is made out of anodized titanium! It is a very special credit card with many privileges. It is usually given out on an invitation basis and it is not something that you can apply for.



Coming back to the history of credit cards, the first commercial issue of credit cards was made by Diners club in the 1950’s. Diner’s club initially came out with their credit cards that allowed patrons to eat at restaurants without having to pay cash. They would just produce their diner’s club card and would then pay off their balance at a later date. It was technically not a credit card as the card holder had to pay off the whole balance within a certain period.



This concept was however changed by American Express in 1958 that introduced the concept of a credit card that is found today. Bank of America followed American Express by releasing their Visa credit card, also in 1958.



During the 1960’s, credit cards were mostly used for convenience. They were usually issued to salesman who preferred not to carry large amounts of cash. During the 1960’s, the credit card was marketed as an instrument that saved time and not one that provided a personal loan or line of credit. However, things changed quickly after that as more and more customers started to spend beyond their means by using their credit cards or charge cards. It is quite amazing to see people even now who are under the impression that a credit card is just like free money. Most people do not realize that high interest fees over a long period of time makes them pay almost twice the amount of what they had borrowed in the first place.



Thomas Ajava writes for CreditCardsforSmallBusinesses.com - credit cards for small businesses.