Millions of people use credit cards daily without thinking twice about how they started. Some people never carry cash and rely on their cards for everything they need. They use their cards to pay for restaurant meals, gas, the food they need, and their utility bills. Others reserve credit cards for expensive purchases they could not make with cash, like a new computer for school or a new smart TV for their living room. Learning about the history of credit cards is an excellent way to see how these cards have changed over the years.
According to SoFi, the history of when credit cards were first used started in 1914 with Metal Money, a precursor to the modern credit card that Western Union launched. Though the card was only available for a small group of people, it allowed them to present the card to make a purchase and pay for it later. John Biggins launched another version of the credit card in 1946, which he called the Charg-it card. Users could only make purchases with the cards at stores within a few blocks of their bank. The Air Travel Card also appeared during this era and allowed users to buy tickets to flights from different airlines.
While there were some early versions of the modern credit card, the first real one was the Diners Club. Frank McNamara and Ralph Schneider wanted to help others avoid the embarrassing situations that happened in restaurants when diners didn’t have a way to pay for their meals. The Diners Club card allowed members to buy meals in different restaurants and present their cards. When their bills came at the end of the month, they needed to pay them in full. This card was later expanded to let members use it outside of restaurants.
After seeing the results that others had, banks began looking for ways to introduce their own credit cards. American Express introduced a credit card in 1958, requiring users to pay their monthly balances. The card changed from cardboard to plastic the next year to make it more durable. Bank of America also issued its first card the same year, which was only available to select people in California. Other banks quickly jumped on the bandwagon and implemented new cards with benefits for members, which paved the way for today’s credit cards.
Credit Card Laws
The federal government has passed laws to protect consumers since the introduction of credit cards. These laws protect users from high fees and regulate what card companies can do. Credit cards now come in a range of styles that people can only use in specific stores to cards accepted around the world.
Credit cards have changed a lot since they first hit the market. In the early days, only select businesses accepted the cards. Members also needed to pay off the money they spent by the next month. Credit cards today have higher balances and offer more convenient repayment terms for users.