Credit cards explained
In a world where there are not enough hours in the day to accomplish what we desire, credit cards are an extremely popular method of purchasing things because they are so quick and easy to use. One swipe of the magnetic strip through the narrow slot of a machine and the merchandise is yours, providing you weren’t declined for some reason. But have you ever wondered about the history behind the mass utilization of credit cards? How did they become so fashionable and widespread? A little research is needed in order to have credit cards explained for those who would like to know all about the financial drama that went on behind the scenes of the credit card industry, and this article will delves into such information.
During the 1920’s when the United States was experiencing an economic post-war boom and everybody had extra money to spend, credit cards were created by companies such as hotel and oil firms for limited use by their customers. These “pre-modern” credit cards were meant primarily for developing a better rapport between regular customers and the businesses the frequented and did not become mainstream until after WWII. In 1946, the first actual bank card called “Charg-It” was issued by a Brooklyn bank and operated much like a credit card operates today. Then, in 1950, The Diners Club Card entered into the world of paperless merchandise transactions and became so popular that by 1951 there were a little over 20,000 Diners Club cardholders in the United States. American Express came along in 1959 and soon thereafter, established itself overseas, with approximately 1 million cards being used at over 85,000 businesses in a few short years. The national credit card system was created in 1966 when an assemblage of banks produced the InterBank Card Association, now recognized as MasterCard Worldwide.
As credit cards became more popular and their processing system more complex, the banks issuing the cards turned to outside sources to assist in processing the information necessary to direct and oversee their customers’ credit card transactions. This action greatly lessened the amount it cost for banks to issue cards themselves, and allowed the credit industry to proliferate into the huge production that it is today.
It was Visa and MasterCard which normalized the regulations for managing credit card information on a mass scale. Meant to eliminate fraud and identity theft, the practice of maintaining extremely tight security measures with regard to an individual’s credit account is constantly being updated in an attempt to stay one step ahead of credit card scammers and thieves.
Although credit cards are still extensively used by everyone, with consumers charging approximately $1.5 trillion in the year 2000, the rapid development of the internet-related technology has generated alternatives to paying with a credit card, such as PayPal, cell phone chips, and credit card key fobs, with the intention of these new forms of payment devices being to reduce the incidences of identity theft and misappropriation of account numbers.