Credit Cards - History of Credit Cards
Do you or someone you know use a credit card? A credit card is a small rectangle of plastic that has information digitally stored on it. it can be used to purchase things, and then the person can pay for the items later. Today, we typically scan our credit cards with a machine at the store. The machine reads the digital information and lets the credit company know how much we spent so that we can pay later. The credit card company pays the store, and then we pay the credit company.
People have been buying things on "credit" for several centuries. Historically, storekeepers would allow people to buy on "credit" if they knew the person well. The store kept track of the bill by hand, and the customers would pay on their accounts at the store periodically.
The first bankcard, named "Charg-It," was introduced in 1946 by John Biggins, a banker in Brooklyn. When a customer used it for a purchase, the bill was forwarded to Biggins' bank. So, instead of the store allowing a customer to buy something on "credit," the customer used the card and the bank paid the store. John Biggins did not issue the Charg-It cards to just anyone. The person had to bank at Biggins' Bank and purchase locally.
Other types of credit cards soon followed. The Diners Club Card was invented in 1949, for the purpose of using credit to dine out. In 1950, American Express took off. This helped with those traveling abroad or working with traveler's checks. The idea was that the American Express card could be used as credit anywhere in the world. In 1966, Mastercard and Visa took off as well.
Over time, the idea of the credit card has evolved, and now people are able to pay for goods and services without having a card in hand! Paypal is an internet payment method, and in some stores, you can even pay using an app on your cell phone!