Credit cards have become an essential part of our modern lifestyle. Have you ever wondered how will you able to manage your finances without this financial tool? To be honest, it is now very difficult to imagine a world without credit cards today but obviously, a time existed before the invention of this financial instrument. So, how credit cards did come into existence and how these plastic cards evolved over the years – we all must know about the history of this financial instrument.
Well, yes. Here you guessed it right. In this article, we are going to discuss the credit card’s history that is worth reading.
The Concept of the credit card
Let’s begin with late 1800 when the merchants and consumers exchanged goods for the transaction and they had started the credit’s concept. They basically utilized credit coins & charge plates as currency in order to make transactions.
But the concept of credit cards came into existence only after a half a century ago. The term of credit card or plastic money was first mentioned in Edward Bellamy’s Utopian Novel i.e. “Looking Backwards.” In this novel, Edward Bellamy mentioned credit cards eleven times in his book.
Antecedent to the modern credit card in the USA
In the year 1921, Western Union offered charge cards for making regular transactions. These cards were printed on the paper stock cards. By the year 1938, most of the companies started accepting each other charge cards. From the 1940s, oil gas companies started accepting charge cards from vehicle owners in return for fuel and several other oil-based products.
Well, have you ever watched a charge plate? According to historians, the charge plate was the original antecedent to the modern credit card. It was utilized in the USA from the 1930s to the 1950s.
The idea of the first credit card
The first credit card or plastic money was started in the year 1949 when “Frank McNamara has forgotten to carry his wallet along with himself to an official dinner at New York’s Major Cabin Grill.” Somehow he managed to pay the bill but he decided that there must be a good alternative to cash. And then, the small cardboard card was invented then named as Diners Club Card. Considered as the first credit card, this card was introduced mainly for entertainment and travel purposes. It worked like a charge card wherein the card’s bill has to be paid in full by the end of the month. By the year 1960, this cardboard card was replaced with plastic.
And it was the American Express who first introduced the plastic card in the year 1958 thereby replacing cardboard and celluloid. As a tough competitor to Diner’s Club, American Express took plastic money or credit cards to another level.
The Evolution of Credit cards
The 1900s to 1940s: Retail stores and oil gas companies offered their own credit cards to be utilized only at the retailer. Those cards used to form with cardboard, paper, and then metal.
The 1950s: This year, the credit card named Diners Club was invented for entertainment and travel purposes and this card was believed to be the first widely used card. American Express offered its own plastic entertainment and travel card later in the decade. Both of these cards required a cardmember to clear the balance every month
Middle of the 1960s: The 1st generic purpose credit card, later known as Visa and MasterCard have been introduced in the market.
1973: In this year, the processing of electronic credit card had started. This enables merchants to get information from banks and financial institutions that the cardmember had sufficient credit for the purchase. It gave users more flexibility in utilizing their cards at different places.
The mid-1990s: The EMV (Europay, MasterCard, and Visa) chip was launched in Europe, ensuring more safety and security.
At present: Today innumerable banks and financial institutions across the globe including Middle East countries that offer different types of credit cards. It is noticeable, that the first credit card in UAE was introduced by Bank of Oman in 1967 but the use of credit cards rapidly increased in recent years in the UAE. Customers can use plastic cards at merchants throughout the world. They also have the convenience and flexibility to clear the outstanding balance every month or carry forward their balance to the next month’s billing cycle. Also, credit cards come with a wide range of rewards and benefits, helping credit card users to make the most of their every spending.
The final verdict
Now, credit cards have become an important part of our daily lifestyle since this plastic money helps us to buy things without cash. There are several banks and financial institutions in the UAE that offer different types of plastic cards to meet the diverse need of its customers. From a reward card and travel card to a shopping card and cashback credit card, each credit card comes with its own benefits and features. Make sure, you compare credit cards online in order to find out the right credit card based on your spending habits and lifestyle requirements.
