Credit, finance, credit cards, finance and financial charges on your credit and charge cards. You might well think and imagine that credit is a relatively new invention that has got most of us into big time trouble currently in the year of 2009. If the banks had not loaned all those people money to buy houses none or few of them can afford life would be better and simpler for the American and even global economy and many poor people now in dire financial straights. If the credit card companies had not offered credit cards so easy to most of us and worst of all to those young college kids much misery and needless suffering might have been avoided or at least curtailed. Credit and easy credit might well seem to be a modern innovation inflicted on modern times you might well imagine and indeed believe.



The evolution of credit and money is well documented in history as well as historical records of finance and commerce. Amazingly way back in time the Babylonians, Egyptians and Romans made extensive use of credit. Indeed the word “credit” even predates Latin and Roman time periods evolved from the Latin word “credo”, a hybrid of Sanskrit and Latin that means I believe. A simpler translation of this Latin term “credo” could be stated as “I trust”.

The Bible itself, Koran and the Talmud all contain innumerable references to credit, money and interest (the value placed on money loaned – usury). The Code of Hammurabi, King of Babylon circa 1800 B.C. Refers to credit transactions as well as penalties for nonpayment of debts. One of the early Plantagenet kings of England caused the bankruptcy of a large organization in Florence (Italy) because he had defaulted on his loans and the lenders had neither the military means nor might to enforce payment of this debt back to the lender. Edward III of England, one of the first rulers attempting to codify the law. Had many references both to credit as well as debt written into the then law of the land?

The greatest impetus to the development and growth of credit specifically in mercantile areas, as well as that of commerce and trade came most fully and quickly with the industrial revolution. Although credit for individual use (that is consumer credit) probably is as old as Mercantile credit, it had relatively little place, value nor importance in the economic scheme of things until the period of the mid 1880's. Prior to that point in time. The use of credit to provide for personal needs had a somewhat contradictory aspect. For the very rich. Credit was often the only acceptable way of doing business. A gentleman, so the rules and customs of the day went never carried large amounts of money, cash or valuables. Indeed his word was his bond. From time to time, somewhat rarely women of wealth, power and riches might be accorded the same legal and financial status as a man of means and reputation. However on the other side of the fence, or the bankers counter, credit and debt for those of lower financial means was often frowned upon as a personal and moral failure and showed to a great degree lack of maturity and responsibility in their lives.

To great degrees what has gotten many of the individuals we know who are currently in deep financial trouble in 2009 is not credit or the concept of credit itself. Credit itself goes back all the way in history almost to the dawn of man. It was the easy and lax granting of credit which led us to our current fiscal and monetary troubles and dilemmas.