I remember going shopping with my Mum and she didn’t pull out a plastic card to pay for anything. Instead, she paid cash or wrote a cheque. When was the last time you saw someone pull out their cheque book at a store to make their purchase? Today the cashier usually asks, “Will that be on your credit card?” For many people, they don’t know or remember a time when credit cards weren’t part of everyday life.
The History of Credit Cards
Let’s take a journey back in time, to the 19th century to be exact. That’s when the first modern equivalent of credit cards showed up.
1865. Charge coins are issued by department stores to extend holders’ credit.
1882. American Express introduces money orders.
1891. American Express introduces traveller’s cheques.
1935. Charge plates, the metal predecessors to credit cards, gain popularity in department stores and remain popular through 1950.
1941. Department store credit becomes widespread.
1946. Charg-It cards are launched by a Brooklyn banker, allowing his account holders to charge purchases at local merchants with the charges being forwarded to his bank. The bank covered the cost and then collected payment.
1950. Diner’s Club debuts.
1951. The first charge card is issued by Franklin’s National Bank.
1955. First patent is issued for the term “Credit Card” by gas station owners who invented the first pump that could accept cards.
1958. BankAmericard mails out 60,000 credit cards to unknown Californians, and is the first revolving credit program. Other banks follow suit, launching consumer cards that allow cardholders to carry their monthly balance forward for a nominal finance charge.
1959. American Express introduces the first plastic card.
1966. BankAmericard becomes licensed as the first general purpose card. In addition, Interbank Card Association forms.
1968. Interbank Card Association becomes Mastercard.
1970. IBM unveils the magnetic strip and is introduced to combat credit card fraud of the previous decade.
1976. BankAmericard becomes Visa.
1981. Credit cards begin rolling out the first rewards programs.
1986. Discover card is introduced, and acquires Diner’s Club 22 years later.
2015. Embedded chips are introduced as an additional security measure.
And there you have it, credit cards as we know them today.
Getting By Without Credit Cards
Before the advent of today’s credit card or their historical equivalents, people had to save up and have the funds available to make a purchase. When you were buying groceries, gas, clothing, or any other goods, cash needed to be in-hand or available in your chequing account. When you went on a vacation, you purchased Travellers Cheques that were honoured around the world (and safer than carrying around large sums of cash). You had to plan ahead, and this was good, as you avoided credit card debt.
If your credit card debt and unsecured debt is getting out of control, history shows us that it is possible to get by without credit. Give it try—put your cards away in a drawer, establish a spending plan by calculating your income and expenses (including debt payments), and allocate the funds accordingly. Use your chequing account to make your ongoing payments either by automatic payment, debit, or cash. Put the funds for occasional expenses like car repairs, clothes, and other items into a savings account and forget about them until you need them. If you're carrying unsecured debt, like a credit card balance or a car or student loan, see if you can decrease some of your expenses and increase your payments on these items to pay them off quicker. (By the way, our Debt Calculator can help show you just how much quicker and money you'll save by increasing your payments.)
Debt Relief Is Available
If your credit card addiction is too great and you just can’t seem to make a dent in your debt on your own, a Debt Consolidation Program might be the solution. Our certified counsellors can help you get a handle on your unsecured debt and learn to manage your money and live without credit cards—or at least less credit! It's important to remember that credit cards don't increase the amount of money you have available (it'll only increase the amount of money you'll end up owing), but a good spending plan can.
Bonus Historical Fun Fact! You may think credit card fraud is relatively new, but the first reported case was in 1899. A man received a “credit card” issued by a local carriage company; however he didn’t believe in credit and threw it away. Someone else found it and used it, racking up $26 in charges (that's nearly $800 today!) which was billed back to the original owner.
