It all began in the year 1951, when a New York based bank called Franklin National Bank started providing cards to a select few of their loan customers to enable them to make purchases using the cards as collateral. The bank had no idea that they had just begun a consumer revolution that would change the nature and scope of financial transactions across the globe.
The Growth of Credit Cards
American Express quickly jumped onto the credit card bandwagon and even though it was essentially a company issuing only traveller’s cheques, in 1958, they began issuing credit cards too. This was a win-win for all stakeholders because:
credit card companies made handsome profits
users found the cards to be convenient to carry and they enjoyed the extra benefits and perks
retailers and shop keepers discovered that consumers spent more using their cards instead of cash
Barely a year later, in 1959, Bank of America launched the BankAmericard, the predecessor of the Visa credit card. In response to its phenomenal popularity, 4 banks based in California launched a rival credit card known as MasterCharge. In the mid 70s, BankAmericard was renamed Visa and barely 3 years later, MasterCharge became MasterCard.
The trio of Visa, MasterCard and American Express, or AmEx, have survived in the global marketplace since then. Many other cards were launched and died but these 3 have retained their hold with varying degrees of success in different geographic and economic strata.
Current Credit Cards
Nowadays credit cards offer a lot more than the original cards did; you often have the option of getting rewards, cash back, 0% balance transfers, discounts, free air miles, and so much more. Cards also look much better than before because they are often available in a wider variety of colours, designs and shapes. On some cards, you can have a photo or creative design of your choice printed on them.
One of the major advancements of credit cards is that they enable you to shop online securely and safely. Online shopping now accounts for almost £9 billion which accounts for approximately 40 percent of annual credit card sales. Just last year, Britons spent almost £24 billion on their credit cards - there are almost 5 cards in circulation for every adult living in the UK. Futurists are already sounding the death knell of cash and it seems to be only a matter of time before that happens.
