ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel
  • »
  • Personal Finance»
  • Managing Credit Cards & Payment Options

Credit and Credit Cards, A Short History

Updated on September 28, 2011

History of the Credit Card

For thousands of years, merchants have been offering credit lines to their customers. We know this because there are some very old accounting records found from both the Babylonian and Assyrian cultures. This was around the time of the Bronze Age. There was no set process of doing this. You can imagine though, that some of the same things mattered to those giving the credit or loan. Things like whether or not a person was risky, or sometimes just knowing a person was enough. If a person had shown themselves to be good on their word in the past, and had say a steady income, they were probably more likely to get a "line of credit." There was no "scientific" process applied though.

The down side was that a lot of people could potentially be affected, say if a crop failed, or if people just up and moved away. A whole community could be affected very negatively because the merchant would be out so much money. It had potential for wiping out an economy really as the ripple effects played out. Over time, smart bankers and traders could diversify an economy. Still, it was realized that a lot more people could benefit from an organized way of using credit.

Giving credit goes way back in history
Giving credit goes way back in history

The First General Purpose Credit Card is from the US

In the 1920's, the United States originated the first credit cards. Individual companies such as oil companies and hotel chains were beginning to issue them to customers. They were issued for company stores in different cities. For Americans that were doing a lot of traveling, this became very helpful. It was a novel idea, for these cards to be accepted in states that were rather distant from each other.

After World War II many veterans returned home and some were able to use credit cards for both business and pleasure. In 1950, the first general all purpose card came about. It was introduced by the Diners Club, Inc. The company charged its card holders an annual fee, and also billed them for the charges either monthly or yearly. The American Express company was the other to establish a major credit card in 1958.

Some of the earlier cards were made of a type of cardboard. Merchants would take the card and write the information down, like name and account information. It was in the 1950's when they were first made of plastic and had the raised numbers which made them perfect for use with those older carbon copy machines. The information was printed on carbon sales slips.

Malls today definitely are happy for the creation of credit cards.
Malls today definitely are happy for the creation of credit cards.

Visa, MasterCard and others

The Bank of America in California started the first national bank card plan in 1959. This system was licensed in other states as well starting in 1966 and was renamed Visa in 1976.

Then Master Charge followed, as did others. Master Charge changed over to the name MasterCard. In an effort to offer more services (like meals and lodging for example), many smaller banks joined forces and made relationships with larger national or international banks.

In the 1970's, the magnetic strips came into play. These strips were put on the backs of the credit cards which contained any possible relevant information. This made it possible for a computer to track the use of the card. In the 1990's the experimentation of computer chips embedded into cards began. As we see today, it is the magnetic strip that still is the key component to this kind of modern merchant commerce. Its hard now, to imagine a time without credit cards, they are so easy to get and so prevalent. The main key now is to not get into debt, or to get out of debt once in it. It has become all to easy to overspend. Good balance and paying off often is the key to success.


    0 of 8192 characters used
    Post Comment

    • oceansnsunsets profile image

      Paula 7 years ago from The Midwest, USA

      Hi Bob, and thank you!

    • oceansnsunsets profile image

      Paula 7 years ago from The Midwest, USA

      Thank you very much, Rpalulis!

    • profile image

      BobTiln 7 years ago

      Very interesting hub!

    • rpalulis profile image

      rpalulis 7 years ago from NY

      Thank you for sharing this short history on credit, and credit cards. Very interesting how credit as progressed to where it is today.


    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: ""

    Show Details
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the or domains, for performance and efficiency reasons. (Privacy Policy)
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)