History and evolution of credit card: Here's all you need to know
In 1946, John C Biggins created the precursor to the modern credit card through 'Charg-It', a system that allowed people in a two-square-block radius to charge their purchases to the bank
Representational image. AFP
It’s tough for us to imagine our lives without credit cards. These cards help us fulfil our demands and needs while offering a variety of benefits. But did you know when and why credit cards were actually invented? Let’s find out:
Credit cards came into existence in the United States in the 1920s. Individual firms and hotel chains began issuing these cards to customers for purchases made at their outlets.
Furthermore, some companies also came up with the concept of ‘metal money’, where a metal plate was given to select customers allowing them to postpone payment.
History and evolution of credit card
In 1946, John C Biggins from Flatbush National Bank of Brooklyn, New York, created the precursor to the modern credit card through “Charg-It”, a system that allowed people in a two-square-block radius to charge their purchases to the bank. The option was limited, since merchants had to leave sale slips for the bank. But the option gave much ease to locals.
In 1950, the Diners’ Club, Inc., introduced the first credit card that could be used across establishments. The card could be honoured at any participating store/outlet. According to an article in Time Magazine, the card was very successful. It expanded to 42,000 card holders and handled more than $500,000 of transactions at 330 establishments in a single month. In five years, the Diners’ Club had 300,000 members. In 1958, the American Express Company came up with another such plan.
The Franklin National Bank’s 1952 card is also regarded by many as the first true “credit card” as consumers could pay for their purchases later, with interest.
In 1959, American Express came out with a plastic credit card. Soon, others followed. In 1960, IBM introduced a magnetic strip on the cards, which made them unique. Now, these stripes are being replaced by chip technology to make them harder to hack.
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