Have you ever wondered what a credit card is? A credit card is a card made from thin plastic, usually 3-1/8 inches by 2-1/8 inches in size, containing identification information such as a signature or picture, which authorizes the named person to be periodically billed for purchases or services made to his account. Information on the card is examined by automated teller machines (ATMs), store readers, and computers from banks and the Internet. The use of credit cards began in the United States in the 1920s, at a time individual establishments, such as hotels and the oil industry, started issuing them to customers for purchases made at those businesses. This use improved significantly after World War II. In 1950, Diners Club introduced the first universal card which could be used at different stores and businesses. Cardholders were charged and billed annual and monthly fees. American Express followed suit in 1958. The bank credit-card system followed much later. Upon receipt of sales slips, the account of the merchant is credited by the banks to be paid by the cardholder at the end of the billing period. The balance is either paid in full or in monthly downpayments with interest at the discretion of the cardholder. The first statewide national bank system was BankAmericard which began in 1959 by Bank of America in 1959. It was granted its license in other states beginning 1966 and was later known as Visa in 1976. MasterCard, previously MasterCharge, followed. Smaller banks offering credit cards locally as well as regionally merged with large national or international banks in order to offer expanded services, such as meals and lodging. Have you ever experienced being behind someone in line at the store shuffling through a stack of what must be at least 10 credit cards? Experts revealed that many U.S. citizens have at least one credit card. Indeed, credit cards have become valuable resources of identification. When widely used, a credit card can afford convenience and permit you to make purchases with almost a month to pay for them before being charged with finance charges. Theoretically it sounds good. The truth is that many consumers are powerless to fully use these advantages because they are burdened with credit card balances every month, paying finance charges that can increase to a whopping 23 percent. It is quite irresistible for many to use the old "plastic" for purchases on impulse or buying things which are unnecessary. The numbers are alarming: In 1999, American consumers charged about $1.2 trillion on their general-purpose credit cards. You may freely reprint this article provided the following author's biography (including the live URL link) remains intact: About The Author |
