|
The
credit card was the successor of a variety of
merchant credit schemes. It was first used in the
1920s,
in the United States, specifically to sell
fuel
to a growing number of
automobile
owners. In
1938
several companies started to accept each other's
cards.
The
concept of using a card for purchases was invented
in
1887
by
Edward Bellamy
and described in his utopian novel
Looking Backward.
Bellamy uses the explicit term "Credit Card"
eleven times in his novel (Chapters 9, 10, 11, 13,
25 and 26) and 3 times (Chapters 4, 8 and 19) in
its sequel, Equality.
The
concept of paying merchants using a card was
invented in
1950
by Ralph Schneider and
Frank X. McNamara
in order to consolidate multiple cards. The
Diners Club,
which was created partially through a merger with
Dine and Sign, produced the first "general
purpose"
charge card,
which is similar but required the entire bill to
be paid with each statement; it was followed
shortly thereafter by American Express and Carte
Blanche.
Western Union
had begun issuing charge cards to its frequent
customers in
1914.
Bank of America
created the BankAmericard in
1958,
a product which eventually evolved into the
Visa
system ("Chargex" also became Visa).
MasterCard
came to being in 1966 when a group of
credit-issuing banks established
MasterCharge.
The fractured nature of the US banking system
meant that credit cards became an effective way
for those who were traveling around the country
to, in effect, move their credit to places where
they could not directly use their banking
facilities. In 1966
Barclaycard
in the UK launched the first credit card outside
of the US.
There
are now countless variations on the basic concept
of revolving credit for individuals (as issued by
banks and honored by a network of financial
institutions), including organization-branded
credit cards, corporate-user credit cards, store
cards and so on.
In
contrast, although having reached very high
adoption levels in the US, Canada and the UK, it
is important to note that many cultures were much
more cash-oriented in the latter half of the
twentieth century
(Germany, France, Switzerland, among many others).
In these places, the take-up of credit cards was
initially much slower. It took until the 1990s to
reach anything like the percentage
market-penetration levels achieved in the US,
Canada or UK. In many countries acceptance still
remains poor as the use of a credit card system
depends on the banking system being perceived as
reliable.
In
contrast, because of the legislative framework
surrounding banking system overdrafts, some
countries, France in particular, were much faster
to develop and adopt chip-based credit cards which
are now seen as major anti-fraud credit devices.
The
design of the Credit Card itself has become a
major selling point in recent years. The value of
the card to the Issuer being related to the
Customer's usage of the card. This has led to the
rise of Co-Brand and
Affinity
cards - where the card design is related to the
Affinity (a University, for example) leading to
higher card usage. In most cases a percentage of
the value of the card is returned to the Affinity
group.
The
ultimate extension of this is the personalized
card, first used by
Bank of Hawaii
in 1969, but now delivered online by software
firms such as
Serverside
to banks including
ANZ,
KBC,
Abbey,
Fortis
and
ING.
|
