Credit cards are everywhere. Almost 70% transaction in Japan is through Credit cards. With the Olympics in the offing, the usage of ‘plastic money’ is getting more popular. The word credit comes from Latin, meaning “trust”. When you sell something to another person, but give them time to pay, you trust them to pay you back. How did the idea of the first credit card start? Which was the first credit card? How credit cards have evolved? When was the first credit card introduced in India? The modern credit cards we all know grew in popularity in the 1950s, when banks started issuing them, but the concept of creating a physical object whose holder should be extended credit goes back well into the 19th century. The most common pre-plastic credit instruments were ‘charge plates’, celluloid “coins” and ‘charge coins’.
‘Charge plates’, often called ‘Charga-Plates’, are the predecessors to credit cards. Used until the early ’60s, charge plates are made of aluminium or white metal plates. They are about the size of a dog tag and are embossed with the customer’s name and address. Charga-plates were issued mostly by department stores, but also by a few oil companies and store associations. They were sometimes kept in the stores and retrieved by the clerk when an authorized user made a purchase. Between 300 and 500 different ones are estimated to exist.
‘Charge coins’ are believed to have been first issued around 1865. At first, they were made of celluloid, which is an early form of plastic. Later ones were made of copper, aluminium, steel or white metal, which is when they became known as charge coins. They came in various shapes and not all were round; some were triangular and others had unique shapes. These credit pieces were also mainly issued by department stores, and usually displayed the customer’s identification number and an image connected with the merchant.
John Biggins introduced a card that allowed customers to charge purchases from local merchants in his neighbourhood. Customers had to have an account at Biggins' the bank where the charge was forwarded. His bank covered the cost and then got payment from the customer. Customers had to have an account at Biggins' bank where the charge was forwarded. His bank covered the cost and then got payment from the customer. This is a major development in the history of the credit card
Frank McNamara created a Diners' Club card — a small piece of cardboard used to charge entertainment and travel expenses — after forgetting his wallet at a business lunch. This was the first credit card in widespread use. ‘He wines and dines without ever spending cash’ This was the advertisement of Diners Club in 1960s.Plastic was used to make an American Express charge card, which required payments in full at the end of the month. PVC plastic soon replaced the cardboard or thin, paper-like celluloid used in its contemporaries.
The Interbank Card Association worked with banks in Mexico, Europe and Japan. To reflect the global banks involved, the association changed its name to MasterCard. Driven by the prevalence of credit card fraud in the '60s, IBM rolled out the magnetic stripe in a pilot project with American Airlines and American Express. The magnetic stripe, which stored the credit card's data, was unveiled at O'Hare Airport in Chicago