History tends to repeat itself—and occasionally one of the do-overs is an improvement. The credit card is an example of a modern improvement on an old idea.
The concept of buyers and sellers exchanging goods without the transfer of immediate payment most likely began before records were kept. Over time, buyers became known as customers, sellers evolved into merchants, and trade between the two grew more far reaching.
Enter charge coins.
Those odd-shaped pieces of metal or celluloid arrived in the marketplace during the late 1800s. Merchants who issued charge coins tried to make them look different from competitor’s coins by stamping them with an image of their business. Customers were identified by a number.
Eventually charge coins gave way to “proprietary” charge cards. These cards, introduced in the early 1900’s by department stores and oil companies to foster consumer loyalty, could only be used at predetermined locations. The amount charged had to be paid in full monthly.
In 1946, a Brooklyn banker launched a bank card that he distributed to account holders at his bank. If you were an account holder, you could use the card at certain local stores. The store sent the purchase amount to the bank, which in turn billed you.
In the early 1950s, the market for credit cards exploded with the introduction of the general purpose Diners Club Card. “Universal” cards followed, and at last there was a true credit card that could be used at numerous businesses and locations. Soon after, revolving credit made its debut—along with finance charges.
Today, you can choose between many credit card companies, pick from a variety of personalized cards, and with one swipe through an electronic terminal, buy virtually any product in the world.
Since today is the history of tomorrow, what’s next? Stay tuned. No doubt the evolution of credit cards will continue.