THE HISTORY OF CREDIT CARD | FACTS | REVOLUTION

November 24, 2022 HISTORY OF CREDIT CARD , WHAT IS A CREDIT CARD , WHAT IS CREDIT CARD CVV NUMBER 0 Comments

THE HISTORY OF CREDIT CARD | FACTS | REVOLUTION

THE HISTORY OF CREDIT CARD | Let's learn full detail of what is the history of credit card's timeline & when credit cards were invented with hidden secret facts in 2023.

WHAT IS THE HISTORY OF CREDIT CARD

When you go to the checkout line at a grocery store or when it is time to pay the bill after eating dinner in a restaurant payment is as simple as handing over your credit card to the cashier or waitress.

And with a quick swipe or scan, your debt is paid, and you're on your way. You don't even need to carry physical paper money as that tiny plastic card bank account where you can see your total amounts as well as transactions right at your fingertips on a smartphone.

Credit checks are extremely common in the United States today, in fact, about 79% of Americans have one but how did we get here where did the idea of a credit card come from?

And what led to its creation? The history behind credit cards is actually a long and interesting one that dates all the way back to the earliest forms of trade in human history, as well as the creation of the concept of credit.

It's safe to say that credit cards have come and today we will discover their evolution.

The idea of credit cards makes transactions so much easier and it's hard to imagine the world without them.

If you want to learn completely what is a credit card, then I have explained it on this site for beginners. If you wish you can read our article.

WHEN CREDIT CARDS WERE INVENTED

The first ever recorded use of currency was in 9000 BCE, in the early parts of human history far before the creation of paper money.

At this time, currency took the form of several cattle, camel shells deerskin notes beads, various types of food, and many other unusual items.

But ever since human civilization developed enough to conceive forms of trading currency, there have been systems of credit.

The concept of credit is where goods are traded, but the seller does not immediately receive payment instead, the debt is recorded and paid at a later date.

Interestingly enough economics is based on predate paper money as we know it. Well, they did not call it credit Bronze Age communities handled transactions in terms of crop yield.

HISTORY OF CREDIT CARD PROCESSING

This system would work in a process where farmers would pay tax on the number of crops they could grow, and essentially promised to hand over that certain amount.

These transactions would occur at the beginning of the season, though, before the crops had grown.

So they would actually pay the taxes 10 months later when the harvest had grown more similar to the structures we have today.

The first credit system that involves writing down and recording debt occurred in Mesopotamia over 5000 years ago, and what many historians consider to be the oldest civilization in human history.

You see in Mesopotamia, the process of taxation, did crop yield was continued but clay tablets were used to record and mark these transactions for the first time in history.

This also coincided with some of the earliest use of written language and humans recording their own history through text.

Systems of credit like the ones found in Mesopotamia and before for 1000s of years, but things would drastically change around the time of the Industrial Revolution and the exceptional expansion of global trade.

Leading to more pronounced and defined modern economic systems in the United States.

WHEN DID CREDIT CARDS COME OUT

The first items that resembled credit cards appeared in the 1800s during the era of westward expansion, merchants would often use things called credit coins or charge plates when trading with farmers.

The credit coins and charge plates would signify crops to be grown by the end of the season.

This way, farmers could use their crops to trade or purchase goods before their crops were grown and that was seen in the Bronze Age.

By the turn of the century, the financial service company Western Union then began giving metal plates to certain customers expanding on the idea of credit coins and charge plates.

These small metal plates let customers pay with credit, however, specific customers to be used for a few particular transactions, meaning they were not open to the general public.

These Western Union metal plates would soon be made obsolete with the introduction of the charging card conceived by the Brooklyn banker John brigands, and was the first loop credit card in some ways this was a risky endeavor as the charge card used brigands own bank.

All transactions when someone used this card it would pay the merchant the money the customer owed for a specific purchase using the bank's own money.

The owner of the charge card would pay back the bank at a later date. Will things like the Western Union metal plate or brigands charge that card were the early prototypes of credit cards?

The first ever credit card was made by the Diners Club by business partners, Frank McNamara and Ralph Schneider in 1949.

There is actually an interesting story behind this invention as well. Some versions of the story differ but the prevailing retelling of second America went to the mayor's cabinet grill in New York City for dinner, when he was finished eating he eventually realized that he had forgotten his wallet at home.

So when it was time to pay the bill, and he didn't have any money, the restaurant wanted him to wash all the dishes.

In order to avoid this McNamara was able to negotiate his way out by signing a paper promising to come back and pay the next day.

McNamara then realized that it would have been so much easier if he could have some indicator that promises payment instead of carrying around a giant wad of cash everywhere he went.

After sharing this idea with Ralph Schneider they officially started the Diners Club McNamara and Schneider's friends' family participated in joining the club.

Each member was then given a cardboard card that could be used at 27 restaurants across New York City allowing the club members to pay back there.

The Diners Club was founded with 200 members but the massive popularity of this creative idea saw it ballooned to 42,000.

Over the next two years, then restaurants across the country also joined in allowing for even more venues for the Diners Club to attend.

Obviously, a credit card offers many advantages over paper currency, as they can EASILY fit into your pocket, wallet, or purse securely and the card itself holds no intrinsic value.

If lost or stolen, then of course, the most appealing benefit is that it allows one to purchase items without directly paying at the moment which makes daily transactions a lot easier.

From this point on credit cards were now introduced into the everyday lives of many Americans.

Well, the Diners Club created the first modern credit card, the first plastic by credit card service company American Express in 1959.

Very quickly this trend caught on among other companies. Many new credit card companies were created and they all used plastic cards.

Meanwhile, the existing companies also switched over the late 1960s saw massive innovations in the credit card industry in many different areas in 1966, Bank of America released a new card called the Bank of America card which was the first to use revolving credit and it still exists today.

People who have this card can use it in every continental state in the United States soon after America Card merged with several regional companies and formed visa, the most used payment processor in history.

In 1969 Credit cards were now fitted with magnetic strips, which could be scanned or swiped, which leads to our peculiar invention story.

It was said that Forrest Perry and IBM engineers were trying to find a way to attach magnetic strips to a credit card.

So it could be scanned or swiped. Perry kept encountering failure though as none of the different types of glue would stick.

So in a fit of frustration, Perry went home for the day and relayed his annoyances to his wife.

Funny enough, his wife suggested that he iron the strip onto the card. The next day, Perry went to work and tried this prize.

It worked. Soon after all credit cards would be fitted with magnetic strips that were ironed on.

The credit card industry continued to grow in the next few decades, leading to inevitable restrictions and regulations.

In 1970, the Fair Credit Reporting Act was passed with the goal to protect customers and credit card users from mistreatment.

This law forced the companies to be transparent with all their information regarding where their money is located, where it is heading to as well as the amount for a given account or card.

Then in 1974, President Ford signed the Equal Credit Opportunity Act. This new law prohibited credit card companies from discriminating based on race or gender.

More recently, some newer law has been passed as well. For example, the Credit Card Accountability, Responsibility, and Disclosure or CARD Act was signed by President Obama in 2009.

This stops companies from charging fees or penalties against customers. Following the 1960s and 70s.

Credit cards started to become more and more prevalent among the American populace.

This would lead to even further advancements in terms of technological innovation and economic growth.

For example, 1985 was the year that marked the first ever purchase made with a discovery credit card worth $26.77 at a Sears in Atlanta, Georgia.

The following year saw some controversy though when the Sears Corporation announced their new discovery card at both MasterCard and Visa were angered and they did not allow their banks to issue discovery cards.

Discovery then responded by filing an antitrust lawsuit against MasterCard and Visa.

The litigation case lasted four years and was only finally resolved in 2004 when the Supreme Court chose not to hear the defendant's appeal allowing banks and card issuers to distribute multiple brands.

1996 further additions to the common credit card in your chips actually started to become common.

So that your Europay MasterCard and Visa constructed the standard smart chip titled EMV chip, and this innovation would be the basis for all upcoming chip cards.

Overall credit cards that use chips are much safer than cards that only have unsecured magnetic strips as these magnetic strips can easily be copied onto fraudulent cards into the new century credit fence.

In 2010. Barkley and orange disputed the first contactless payment card. These new types of credit cards were even easier to use as all one had to do to complete their transaction was tap their card against a terminal, with no swiping or scanning required.

Fast forward to 2014 and we see a massive technological advancement that overlaps with the other widespread technologies of the time that year, Apple unveiled their iPhones.

This allowed customers to store all their banking information on their phone, and even purchase items without a physical credit card.

Only a year later Android Pay which is known as Google Pay was launched. And as I'm sure you might imagine, or even know from personal experiences, with all of these innovations came many opportunities for scams, and frauds with any growing industry and especially for those that involve monetary transactions, theft and fraud will always be an unfortunate reality.

Credit card fraud is actually one of the fastest-growing types of crime in the modern world.

And it is very often difficult to prevent credit card fraud is usually defined as the attempted use of the card that has been stolen reported lost or canceled.

Credit card fraud can also connect with identity theft, as it is also a crime to use a credit card number on a card that you don't own.

When credit cards started to become more prevalent. The first methods of fraud arose with theft of the actual card or by stealing copies of these methods died out when credit cards with electronic processing became the norm in the current day.

The most common type of credit card fraud is through the mail service where a person can steal items that are being mailed from these materials they have access to people's personal information, such as your credit card account or your banking information another form of payment scheme.

Federal regulations state that a credit card company must credit an account once the payment is received.

So some have been able to exploit this by using counterfeit or stolen information to make an advance payment and then immediately draw the money. Unfortunately, this is typically noticed until the next bill arrives.

Counterfeit credit cards are also a massive issue with the internet allowing criminals to use simple technology to take a credit card and then duplicate it usually by using a magnetic strip then there's the issue of the fictitious card where a criminal will create fake making transactions yet in reality, the card doesn't exist and the owner is not real.

Credit card companies have enacted many policies and Prevention's in order to deter such fraud.

For example, embedded microchips, credit card verification, and holograms of transactions over the internet make defense very difficult.

Especially since credit cards can be very appealing for this type of misconduct and given that the customer themselves are not usually held liable with often the company.

Credit cards have had a long history going from clay tablets, all the way up to the plastic cards that we have today.

It is often extremely difficult to predict the future but one might make an educated guess based on the prevailing trends, which seemed to be leading us into the next years.

Right now. It seems that the technological direction of daily economic activity is moving towards total dependence on digital banks.

One suspects that this means credit cards will become even more essential to everyday transactions but who knows in what capacity?

In the future, one possibility that seems incredibly likely is that credit cards will no longer even be needed as a literal and physical cards.

Virtual cards may be all that is required to perform a transaction. This coincides with society's dependence on smartphones, which seemed to be consuming and replacing many other everyday appliances such as cameras, telephones, televisions, computers, books, clocks, watches, flashlights, calculators, and many others.

With the creation of Apple Pay and Google Pay we already see this to a certain extent, but in the coming years, the idea of a credit card could potentially exist solely on your smartphone.

One possibility that may seem more outlandish at the moment, however, but might also become a reality.

Our cordless systems are based on biometrics you see instead of a card that employs radio frequencies, customers might as well use their fingerprints, eye scans, or facial recognition.

There are some major issues with the concept though. For example, a person's biometric information is relatively permanent, which causes problem if your banking information is stolen nowadays.

If your credit card is stolen you can easily change your password but it would be very hard to change your fingerprints or your eye's blood vessels.

Well, technology may move past the need for physical credit card and people's bank accounts as well as the overall system of credit is very likely to stay for the foreseeable future, but still considering what we learned if we turn back to those clay tablets.

I can't help but wonder when did predatory lending begin and how did these instruments enable those practices? And if you're wondering the same thing, follow me to get attest news on the credit card.

Conclude – Here in this article I have explained complete detail the history of credit cards from the 1800s to 2023. If you are a beginner then this information may help you to know everything.

 

Thank you for reading God bless you.

Tags- the history of credit cards.