A short history of the credit card

Using a card to purchase goods is essentially making a promise to pay. By making a purchase with a card you are promising to pay the card issuer who in turn pays for the transaction on your behalf. According to Encyclopaedia Britannica the first use of the credit card was in the USA during the 1920’s for transactions between businesses. The first card to be issued for use by an individual was in the 1950’s with the introduction of the Diner’s Club card in New York for the purpose of paying restaurant bills. This was followed in 1958 by American Express who issued their first card in 1958. Bank of America also issued the BankAmericard (now Visa) bank card later in 1958. These early cards were promoted for use by ‘travelling salesman’ but have since become the staple means of making transactions for millions in the developed world.

Although there are many types of card there are actually few credit card companies. For instance you may even get a Woolworths Everyday Money Card but the guarantor is Mastercard. Cards have diversified to offer more and more additional products. These include products from air miles to loyalty points when shopping. As competition has increased cards have become more readily available for millions and this led to increased regulation to protect the user. For instance, the USA in the 1970’s introduced regulations to outlaw the mass mailing of active cards to individuals who had not requested them. Today the application procedure is much more robust using credit checks before issuing cards.