Even in the 1800s the form of credit was used, coins and plates were credited with a fixed amount of money as payment, this then grew into a form of credit card early in the 1900s.
The beginning of the credit card
In the early 1900s large corporations and some other smaller companies started issuing their own cards, these cards could only be used at the place where they were sold or they had very limited amount of locations were they could be used. Early credit cards where used to create customer loyalty and better customer service, however they are today used for convenience as well.
The first bank released card was called ‘Charge it’ it was introduced in 1946 by John Biggins, a banker for Flatbush national bank of Brooklyn. This new card meant merchants could deposit sales slip into the bank and then the bank would bill the customer who used the card. Soon after the first bank credit card appeared in New York’s Franklin National Bank for loan customers, however this card could also only be used by the bank account holder’s.
The Diners club card was the next big step for credit cards, according to Diners club international a businessman named Frank McNamara was entertaining a group of dinner guests in a new York restaurant, when he discovered he had lost his wallet luckily the restaurant owner knew him so he agreed to let him pay next time they met. This led to Frank McNamara devising the idea to create a card to prove the holder’s identity and ability to pay.
By 1951, the Diners club card had 20,000 members. 10 years later it was replaced with plastic. Diners Club Card were made on credit, but it was technically a charge card, meaning the bill still had to be paid at the end of every month.
According to the archive, American Express formed in 1850 and specialized in deliveries as a competitor to the U.S Postal Service, money orders and traveller’s checks, which they invented in 1891. American Express had even discussed creating a travel charge card as early as 1946, however it was not until the success of the Diners club card that things got put in to motion.
In 1958 the company joined the market with their own product, a charge card for travel and entertainment expenses. By 1959 American Express released its first plastic card instead of the normal cardboard or celluloid.
Just 8 years later in 1967 Barclays Bank in Enfield, Middlesex revealed the first cash machine, at first they were designed to receive hole-punched vouchers of £10.00, which were purchased by the customer from the bank and used in the dispenser when needed.
Credit Cards 2012
Jumping 45 years into the future from the first cash machine, things have changed customers can now withdraw substantial amounts of cash usually only limited by there banks daily allowance to stop fraudsters cleaning credit card accounts in one go. There is also reported to be as many as 2.2 million cash machines worldwide which is around 1 for every 3000 people.
Credit cards are all now made with plastic and as computer technology has grown credit card security has with it, cards now featuring magnetic strips and chips to identify the owner are now common place.