THE HISTORY OF CREDIT AND CREDIT CARDS CHRISTINE

THE HISTORY OF CREDIT AND CREDIT CARDS CHRISTINE TUREK

WHAT IS CREDIT? THE ABILITY OF A CUSTOMER TO OBTAIN GOODS OR SERVICES BEFORE PAYMENT, BASED ON THE TRUST THAT PAYMENT WILL BE MADE IN THE FUTURE.

Money A medium of exchange for goods or services within an economy.

Before Credit Cards Layaways – The store “lays” the item “away” until payment is completed. Customers with low income would use this for large purchases. If unable to fully pay, the customer’s money may be given back, usually less because of a fee. Tab – Customer can make a purchase and pay later. The store keeps a record of expenses for the customer to pay at a later time.

Before Credit Cards Charge Coins – Department stores first issued these in the 1860 s. Charge Plates – Department stores also issued these. They were also called Charga-Plates Late 1800 s & early 1900 s

Before Credit Cards Gasoline Cards – Gas companies offered paper cards to its customers Early 1920 s

Before Credit Cards Charge-It – Launched in 1946 by John Biggins that let customers charge purchases from local merchants in his neighborhood. 1946

First "Credit" Card The Diners’ Club – The first credit card in widespread use. Started by Frank Mc. Namara and Ralph Schneider in 1950

More Credit Card Companies American Express Company – In 1958 they created their own charge card for travel and entertainment expenses. Bank of America – Also launched their own credit card around this time, later would be known as Visa in 1976. 1958

Interbank Card Association A group of 14 banks came together and formed the Interbank Card Association in 1966. They created the card Master. Charge, later known as Master. Card. 1960 s

Paper to Electronic Air Travel Cards – Early example of a card that could be used to make charges at multiple store. It was first launched in 1963. Later in 1969, it became the first card to include a magnetic stripe. 1960 s & 70 s

Credit Card Legalities Through the Years Fair Credit Reporting Act – Credit reporting companies and others that send credit information had to follow guidelines and fix any mistakes on a consumers’ credit report. Consumers have the right to receive a copy of credit report and can challenge the company for inaccurate information on the report. 1970

Credit Card Legalities Through the Years Equal Credit Opportunity Act Companies issuing credit cards can not discriminate based on gender, martial status, race, religion, national origin, age, and others. 1974

Credit Card Legalities Through the Years Fair Debt Collect Practices Act – Put a limit on how debt collectors could contact consumers. It protects against harassment, bans contact with consumers at inconvenient times, and consumers can ask for proof that they owe money among other things. 1974

Credit Card Legalities Through the Years Supreme Court Ruling of 1978 – Credit card issuers “export” nationally whatever interest rate was in the state they were located from. 1974

Reward Programs 1980 s

Reward Programs Discover – Launched nationally in 1986 by Sears. Unlike Master. Card and Visa, they did not have annual fees, had higher credit limits, and had “cash-back bonuses”. 1980 s

Why bother with Reward Programs? It is an incentive to attract more customers and make more money. The customers make more purchases so that they can earn more rewards. Some common rewards include: cash back, hotel and travel points, gas points, airline miles, sign-on bonuses.

Modern Credit Card Trends Mini Cards – Small credit cards that could fit on a keychain. They launched in 2002. People liked how convenient they were. Personalized Credit Cards – Started by Capital One in 2007, it let people choose what background they wanted on their cards. 2000 s

Transition from Magnetic Stripe to Chip Reader EMV – Europay, Mastercard, and Visa. The global standard for cards with computer chips and the technology used to authenticate chip-card transactions. It reduces fraud because every time the card is used, it creates a unique transaction code that cannot be used again. 2015

Modern Ways of Payment Google Wallet – Started in 2011. Phones had to have near-field communication (NFC) chips. Merged with Android Pay and became Google Pay. Apple Wallet – Started in 2012. Apple Pay – Started in 2014. Walmart Pay – Started in 2016 2010 s

What about Walmart? Walmart Master. Card Walmart Credit Card Cash Back Benefits 3% - Walmart. com 2%- Murphy’s USA & Walmart gas stations 1%- where Master. Card is accepted 3%- Walmart. com 2%- Murphy’s USA & Walmart gas stations 1%- Walmart, Walmart Supercenters, Neighborhood Markets & Sam’s Club Annual Fee $0 $0 Annual Percentage Rate 18. 15%-24. 25% 24. 15% Up to $38 https: //upgradedpoint Late Fees s. com/walmart-credit -card-review

Credit Card Debt

Then and Now

Works Cited Hur, Johnson. “History of Credit Card Processing. ” Credit Card Beginning Til Now, Be. Businessed, 6 Sept. 2017, bebusinessed. com/history-of-credit-card-processing/. Mac. Donald, Jay, and Taylor Tompkins. “The History of Credit Cards (Timeline & Major Events). ” Credit. Cards. com, Creditcards. com, www. creditcards. com/credit-card-news/history-of-credit-cards. php. Mc. Kinley, Ed, and Josephine Rossi. “A Brief History of Mobile Wallets. ” Electran. org, ETA, 2017, www. electran. org/publication/transactiontrends/a-brief-history-of-%E 2%80%A 8 mobile-wallets/. Smith, Ernie. “Give Us Some Credit: The History of Credit Cards. ” Tedium: The Dull Side of the Internet. , 7 Apr. 2018, tedium. co/2015/06/09/credit-card-history/. Tellefsyn, Robyn. “A History of Credit (and How to Manage Yours Better). ” So. Fi, Social Finance, 13 Sept. 2018, www. sofi. com/blog/personal-loanhistory-of-credit-cards/. “The Story Behind The Card. ” Diners Club - Company History of Diners Club, BMO Financial Group, www. dinersclubus. com/home/about/dinersclub/story. Tsosie, Claire. “What the First Credit Cards Like. ” Nerd. Wallet, Nerd Wallet, 2 Sept. 2016, www. nerdwallet. com/blog/credit-cards/first-credit-cardslike/.