History of credit cards

Credit cards had a similar concept as early as the mid-18th century.

But it was not until the early 20th century that physical cards appeared.

In the early 20th century, American Auther Morris invented the credit card, which was made of metal.

Although the issuance target is limited and the places of use are restricted, the promise of "enjoy now, pay later" really attracted large companies to start launching credit cards. In 1924, the American General Petroleum Company issued the "Oil Credit Card". "Public Credit Card" was initially used as a VIP card given to company employees and specific customers. Due to the good response, it was later extended to the general public as a means of promoting oil products.

In the face of fierce competition, other oil companies have also successively launched various credit card solutions.

Since then, the credit card market has begun to flourish, and other industries, such as telephone, airline, and railway companies, have also launched credit cards to attract customers.

However, due to the great economic panic in the United States, many card issuing companies suffered losses due to bad debt problems and credit card fraud, which hindered the credit card business. During World War II, the U.S. Federal Reserve Board ordered a war The use of credit cards is prohibited during this period.

It can be said that the prototype of modern credit cards did not take shape until the advent of Diners Card in 1951.

Diners Club first advances money for cardholders and asks for handling fees from merchants.

This model is still used today.

The scope of stores has gradually extended from the catering industry to general retail and tourism-related industries.

American Express began issuing cards in 1959. With its rich travel experience, it successfully expanded its business scope to areas outside the United States.

With the development of credit cards in the 1950s, in addition to the establishment of cardholder consumption without the need to pay cash, the issuing bank (Issuer Bank) charged a handling fee (Merchant Discount) to the special store (Merchant). model, it also provides a revolving credit payment method, which allows cardholders to pay more flexibly and banks increase interest income.

Since then, cardholders have gradually become accustomed to using revolving credit, and the development of bank credit cards has begun to flourish.

In 1976, Citibank was the first to charge an annual fee for a credit card, breaking the longstanding practice of not charging cardholders an annual fee. It did cause an uproar at the time, but it also saved the bank from the dilemma of being unable to make ends meet. .

Later, when charging annual fees for credit cards became almost the norm in the industry, AT&T company waived annual fees as its biggest selling point, hoping to enter the credit card market.

Therefore, many bank credit cards now have systems that charge annual fees and waive annual fees.

History of the development of VISA Card

In 1959, Bank of America in Los Angeles began to promote credit cards throughout California.

In 1965, the Bank of America began to expand its nationwide business. The following year, it issued a BankAmericard with blue, white, and gold patterns, and authorized its trademark to be used by other banks.

In order to expand its business, American Commercial Bank established National BankAmericard Incorporated (NBI) and converted banks using authorized trademarks into non-shareholding members of NBI.

However, BankAmericard, which has a strong American flavor, was not favored by foreign banks. In 1977, BankAmericard was officially renamed Visa.

History of Master Card development

In 1967, the "Western States Bankcard Association (WSBA)" was established, which was composed of four California banks. The association formed plans to launch a Master Charge credit card.

Later, as the association joined the Interbank Card Association, Master Charge was granted to the association. In 1970, the Interbank Card Association officially obtained the patent rights of Master Charge.

In order to expand the international market, Master Charge was renamed Master Card in 1978.

MasterCard took Visa as its main competitor when it was first established. After years of competition, these two credit card organizations have developed into an international organization with more than 14 million special stores around the world. MasterCard and Visa The international market share of major credit cards exceeds 80%.

The various services it provides have become indispensable payment tools for today's consumers.