The history of credit cards

Today it’s referred as the old plastic but all credit
card buffs know that the first credit cards were not
made of plastic but cellulose and metal plates.

Encyclopedia Britannica documents that, the use of
credit cards originated in the United States during
the 1920s, when individual firms, such as oil
companies and hotel chains, began issuing them to

Also, in the 1920′s, stylish stores in the United
States issued them to their favorite customers.

So at that time they were highly localized in
acceptance. So if you lived in Los Angeles you
couldn’t use your credit card in Chicago.

But credit cards gained nationwide usage after the
likes of Henry Ford gave the world mass produced
automobiles. The ability to travel across America had
the unintended consequence of popularizing the credit
card usage.

The 1950ís saw the founding of the Diners Club, which
now is one of the biggest credit card companies

Its founder, Mr. Frank McNamara probably was surprised
the way his start up turned out to be.

The card was first intended to enable Diners customers
to have their meals without paying for them, and
Diners club would foot the bill. The customers then
would repay Diners Club.

In 1951, Bank of America, encouraged by Diners
success, started a card that is now called VISA. And
other California banks started their card which later
became MasterCard. The American Express made its debut
in 1958.

At that time, the banks realized that the card
business was a mass market business, and they later
began mailing anyone with address (some of them dead)
offering the new found craze.



Credit Cards Warning.

Be warned Does the credit card work for you or do you
work for your credit card?

Most people’s answer to that question will depend on
how they treat their “old plastic” as credit cards are

For many with burned fingers will tell you they didn’t
realize that things had gotten so bad until very late,
because most credit card offers try much to sound like
they are actually running a charity. Well, they

And this is not a hate campaign against credit cards.
Surely they have their benefits – in America if you
want to rent a car, you got to have a (major) credit

But, consider this scenario: You receive an offer in
your mail that sounds good, maybe it’s a new
generation TV or a fridge. But it costs $2000. Oh, but
you have a credit card with a $5000 limit, and you
immediately purchase your merchandise.

Typically, here is how your repayment schedule will
play out. Most credit cards charge a minimum of total
balance (usually 2 percent) of the total per month.

Assuming the interest rate is 18 percent and you
choose to repay the minimum amount of $40, $30 of that
will go towards interest and only 10 percent towards
the principle.

As a result, you will take 30 years to repay and end
up paying over $5000 interest.

Sounds scary? It doesnít have to be. The moral of the
illustration is: Use the credit card the same way
porcupines make love; very, very carefully.



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