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History of Credit Card

Friday, May 15, 2009



History of Credit Card

Credit cards have become an established and inescapable part of our society. They are one of the primary forms of completing a purchase transaction in most retail businesses. Even tradesmen such as appliance repairmen or plumbers accept them. How did this all come about? Let's examine the history of the ubiquitous credit card.
The Encyclopedia Britannica tells us that, "the use of credit cards originated in the United States during the 1920s, when individual firms, such as oil companies and hotel chains, began issuing them to customers." But let's see if we can pin it down a little closer.
It is widely believed that the creator of the original credit card issued by a bank was John Biggins in 1946. Biggins worked in Brooklyn, New York at the Flatbush National Bank. He called his creation the "Charge-It" program.
Here's how it worked: Transactions were made between Flatbush National's bank customers and merchants that conducted business locally. These business owners would deposit the sales slips at Flatbush National and in turn the bank would proceed to bill the customer. A brilliant move, the Charge-It program was a convenience for the bank customers and a boon for the local merchants, who reeled in the extra business.
Another theory credits Diner's Club as being the first credit card back in 1950. The credit card issued by Diners Club was conceived by Frank McNamara, Diners' Club creator. It was only used to pay restaurant bills. The intent was to give the dining member a feeling of security because he or she did not have to carry a great deal of cash when going out to eat in the evening.
A minor technicality of this theory is that the Diner's Club Card is really a “charge card “ rather than a credit card because the user could not carry a balance over from month to month.

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