Even though credit cards are so common in modern life, they have only been around for a short time. Find out when the first cards were made and how they changed to become the cards we use today.
Credit cards have made their way into every part of our lives these days, and it's rare for an adult not to carry at least one card. You can still use them to buy goods or services in person, but now you can also use them online, over the phone, to write checks, and even to get cash from a cash machine. People use them in a lot of different ways, like to borrow money, pay for things, and even make money through cashback or reward programmes.
Even though credit cards are very common in modern life, they have only been around for a short time. The first general-purpose credit card was made less than fifty years ago. In this article, we'll talk about where credit cards came from and how they've changed over time, with a focus on the UK market.
Diners Club made the first credit card in 1951, but you could only use it at 27 restaurants in New York. At first, it wasn't a big hit. Only 200 cards were printed. The real story of credit cards started in 1958, when two big new products came out. The first one was the American Express charge card, which had more than a million users in its first five years.
The other thing that was new was the Bank Americard, which was the first credit card. It was made by Joseph Williams while he was working at the Bank of America. Over time, this card would grow into what we now know as the Visa company. Eight years after this card came out, fourteen U.S. banks got together to make Interlink, a competitor to the Bank Americard. By 1979, Interlink would become the Mastercard payment processor.
Barclays Bank made the first general card in the UK in 1967, and forty years later, their Barclaycard is still one of the most popular and widely used cards. In 1972, Barclays and four other UK banks got together to make the Access card. For the next ten years or so, this was the way things were done.
In the 1980s, Visa and Mastercard, the two big credit card processors that are still around today, started to take over more and more of the credit card business. Banks stopped having their own processing centres and started giving out cards that could be used at any store that used one of the two main payment processors. This move made it easy to use cards almost anywhere in the world, which led to a huge growth in their use.
The next big thing to happen was that the internet came along and changed everything. This made it possible for purely online cards like Egg in the UK to offer great benefits to cardholders at low cost to the card issuers. Competition between lenders heated up quickly, and things like balance transfer offers started to show up.
Balance transfer deals seemed to let cardholders move their debt from one card to another without having to pay any interest on it for a long time. Unfortunately, "credit card surfing" couldn't last because it cost the credit industry billions of dollars every year. So, a balance transfer fee was put in place, which made it less appealing to cardholders.
The last big change in the credit card industry was the introduction of Chip and PIN technology. This has greatly cut down on credit card fraud because payments now have to be approved by entering a code number instead of a signature. In 2004, the technology started to be used all over the UK, and it is now used everywhere.
What are credit cards going to do next? Only the card issuers know for sure, but with record levels of debt, many people are hesitant to apply for new cards. As credit companies compete for less business, new applicants are likely to get cards with more attractive features.
