The first credit cards were invented in the 1950s, and since then, they’ve evolved from metal plates used by department stores to modern plastic cards. Credit cards have changed the way we shop and pay for things. You might not know how far back credit history goes and what’s next for our wallet-sized bank accounts. In this article, we’ll explore the story behind those little pieces of plastic in your wallet or purse.
The Ancient History of Credit
As with most things, the history of credit cards can be traced back to ancient times. In some cultures, there is evidence that the concept of credit cards has existed since at least 1000 BC and possibly even earlier. During this period, many different types of transactions were made using a form of credit card called “jiaozi,” which translates to “spice cakes” in English. These spice cakes were often used as currency between merchants who would exchange goods with one another as payment for their goods or services rendered.
As you might imagine from its name alone, jiaozi was not only used for purchases; it was also used by people who wanted to borrow money from others without having any actual money on hand themselves. This practice came about because nothing was ever done with cash in those days. Everything was done through barter systems or other trading methods that required little-to-no actual bank notes or coins on either side.
From Metal Plates to the Charg-It Card
You are likely familiar with the modern-day credit card. But what about the history of credit cards? The first of these plastic payment devices wasn’t even invented until 1958 when a bank in California issued its first magnetic strip-based “charge” card to a customer named Frank McNamara. The card was called the Charg-It Card, allowing customers to pay for their dining expenses at restaurants without having cash on hand. The idea caught on quickly within the industry and soon led to other companies issuing similar products like Diners Club and Carte Blanche.
The Dawn of Modern Credit Cards
Credit cards have origins dating back to the 1950s. The first credit cards were made of plastic and could be swiped at merchants where they were accepted.
The first plastic credit card was issued by Diner’s Club, a restaurant in New York City that allowed its patrons to pay their bills with a card instead of cash or checks. This was big news at the time because users didn’t have to carry around large amounts of cash when dining out.
The Current Plastic Credit Cards
You’re likely familiar with the credit cards we all carry in our wallets. Department stores and gas stations first used them to offer customers points or discounts on purchases, but they quickly became a popular way for consumers to pay for goods.
Today’s credit cards are made of plastic and contain a magnetic strip, an EMV chip (which encrypts this information), and a contactless chip (which also encrypts data). The plastic itself can be made out of PVC or polycarbonate.
EMV and Contactless Credit Cards
EMV stands for Europay, MasterCard, and Visa. These cards have chips that store data and can be used to make small purchases. EMV credit cards use the same technology as contactless debit cards, but only for payment transactions. They won’t let you withdraw cash from an ATM or check your balance in person.
You can still use your EMV chip regularly at retailers, just like a regular card. If prompted, you can use it by swiping it at checkout or entering its PIN code. In addition to benefiting merchants by reducing fraud rates, EMV cards provide security benefits for consumers since their identifying data is stored on the chip itself rather than on its magnetic stripe.
What’s The Future of Credit Cards?
As contactless payments become more popular, we expect to see more mobile and biometric authentication options. Security features like chip-and-PIN technology are also likely to be adopted by more issuers, while dynamic rewards programs should become more common. Credit cards will continue accumulating data and analyzing it to improve their services for cardholders and issuers alike.
Today, at least 60% of Americans already use a digital wallet (such as Apple Pay or Google Pay) for payments weekly or more. This number is expected to grow in the years ahead.
Final Thoughts
Credit cards are a great way to make your life easier, but they can also be dangerous if you don’t know how to use them properly. If you have one and you don’t know how to pay off the balance on time or avoid interest charges, it may be time for some education about credit cards and their history.
