How the Credit Cards Were Born

Do you think that credit cards have always been made of plastic? Are you interested in the origin of credit cards? Who invented them? Read more to find out!

We used to suppose that credit cards are purely a banks? prerogative. But it is not really so. First plastics were issued at the beginning of the twentieth century at some shops and restaurants. These were aimed at reach customers, used as the business certificate, and also were the basic element of those special programs later known as "loyalty programs". These credit cards were made of cardboard.

In the twenties cards were issued not only by shops and restaurants, but also by gas stations. The issuers decided that the material used for making of credit cards should be changed, so the next generation cards were made of metal by the Boston company Farrington Manufacturing. Identification data of a customer were embossed on these cards, so the process of reception of a card was somehow automated.

In the process of purchase registration these data were imprinted on a special commercial "slip". In spite of impressive modern technologies, this method still continues! The name of the founding company was reflected in the international standard ISO 7811-3, covering credit cards u the font used here for embossing letters is named "Farrington 7B".

The rise of credit cards industry began in 1950, when Mr. Bloomingdale initiated a program "Having dined, sign" in Los Angeles. The similar program was initiated by McNamara in New York. They both decided to use embossed cards, but this method was not implemented for unknown reasons, so the first Dinners Club cards were made of cardboard.

Various companies offered very popular gas cards in 1957. Every company tried to attract customers via different ways. Later various "big brothers" (such as American Express) started to enter the market and banks began to consolidate to form payment associations (later these will be known as Visa, MasterCard, Europay, etc.), someone (no one knows this person's name) decided to make plastic cards.

The basic problem was the material. It had to be safe and solid, and at the same time elastic enough to imprint the data on it. Moreover, it had to permit printing processing. First the manufacturers tried to experiment with polyether, then with polyvinylchloride. Finally, they got something they wanted and something we will never stop using - a plastic card.

But of course, a credit card is not just a piece of fine plastic. It is an element of various technologies assuming either domestic or international exchange of data, i.e. well defined structure of agreements. Actually, in this case it does not matter so much, whether these agreements are international, or concluded within a certain company.

In the process of issuing credit cards, Dinners Club brought in return $61 thousand approximately with turn-over of $6,200. Since 1958 the competitors started to enter the market. In the beginning these came from some non-bank spheres (hotel corporation Hilton, American Express). Then the process involved Bank of America. Thus, a very complicated and rapid development of the credit cards industry began.

Bio

Susan Rumbo writes mainly on various credit card deals. Learn more about bad credit and fair credit.