What is the origin of credit cards? Please ask the experts
Credit cards were first produced in the commercial and catering industries in the United States. In 1915, in order to expand sales, attract business and facilitate customers, some stores and restaurants in the United States adopted a "credit chip", which was shaped like a metal badge. It later evolved into a card made of plastic as a voucher for customers' shopping consumption. This was the beginning of the world's earliest credit card. In the 1950s, with the rapid development of the capitalist economy, personal consumption levels improved significantly, and computers and communication technologies began to be widely used in banks, which provided a good environment and conditions for banks to develop credit card business. In 1952, Franklin National Bank of California first issued a bank credit card. By 1959, more than 60 banks in the United States issued credit cards. By the 1960s, credit cards also became popular in the United Kingdom, Japan, Canada and European countries. Since the 1970s, some developing countries and regions have also begun to issue credit card services, such as Hong Kong, Taiwan, Singapore, Malaysia, etc. In the late 1970s, my country's foreign economic and cultural exchanges were expanding day by day. Against this background, many people have brought credit cards, a popular credit payment method abroad, to China. In order to adapt to the needs of reform and opening up, some domestic banks began to get involved in the credit card business. In 1978, Bank of China Guangzhou Branch first signed an agreement with Hong Kong Bank of East Asia and began to act as an agent for credit card business of overseas banks. After a lot of experience and experience, Bank of China Zhujiang Branch issued the Pearl River Card in 1985. In 1986, Bank of China issued the Great Wall Credit Card, filling a gap in China's financial history. When the People's Bank of China carried out the reform of the bank settlement system in 1988, credit cards were included as a new settlement method into the new bank settlement system, thus laying the foundation for the further development of credit cards in our country. The history of credit cards dates back to the early 20th century, the birthplace of credit cards (the United States). However, the cards at that time were made of metal, were issued to limited objects, and were limited to certain places. For example, the American General Petroleum Company launched an oil credit card in 1924 for company employees and specific customers. It was treated as a VIP card and given to customers as a means of promoting oil products. Later, it was also issued to the general public. Due to its good effect, it attracted other oil products. The company follows up. Other industries such as telephone, airline, and railway companies also followed suit, and the credit card market became active. The development of credit cards suffered two setbacks. First, during the Great American Economic Panic, many companies suffered losses due to bad debts and credit card fraud. Second, during World War II, the U.S. Federal Reserve Board banned the use of credit cards during the war. However, these cannot stop the development of credit cards. At that time, the places where credit cards could be used were limited. It was not until the advent of the Diners Club card in 1951 that the prototype of a modern credit card was roughly formed. The cardholder does not need to pay cash when he or she presents this card. Instead, Diners Club advances money for the cardholder and asks for a merchant discount from the merchant, and then charges the cardholder every month. Its business scope has gradually expanded from the original restaurant to include hotels, airlines and other tourism-related industries and general retail stores. American Express (American Express) relied on its rich travel experience to start issuing cards in 1958 and expanded its business scope to areas outside the United States. At this time, sensitive bankers also felt the convenience of credit cards. In the 1950s, nearly a hundred banks joined the ranks of issuing cards. However, because the business volume was limited and limited to local areas, and no annual fees were charged to cardholders, many banks were unable to make ends meet. They have withdrawn one after another, leaving only small and medium-sized financial institutions to survive on the edge of profit. And these surviving banks began to seek innovation and change. For example, Bank of America in Los Angeles began to promote credit cards throughout California in 1959; The First National Bank of San Jose, also in California, was computerized in the same year. During this period, banks also provided revolving credit payment methods, which gave cardholders more flexibility in payment and increased interest income for banks. Since then, cardholders have gradually become accustomed to using revolving credit, and the development of bank credit cards has begun to flourish.
Where did the credit card come from?
The origin of credit cards
Credit cards originated in the United States in 1915.
The earliest institutions to issue credit cards were not banks, but department stores, restaurants, entertainment industries and gasoline companies.
In order to attract customers, promote goods, and expand turnover, some stores and restaurants in the United States selectively issue credit chips similar to metal badges to customers within a certain range. Later, they evolved into cards made of plastic as customer purchases. As proof of consumption of goods, we have launched a credit sales service business for purchasing goods at our store or company or gasoline station with credit chips. Customers can purchase goods on credit at these stores and branches that issue chips and pay on schedule. This is the prototype of the credit card.
It is said that one day, American businessman Frank McNamara was entertaining guests for a meal in a New York hotel. After the meal, he found that he had forgotten his wallet with him. He was deeply embarrassed and had to call his wife to bring it with him. Pay cash at the hotel. So McNamara came up with the idea of ??starting a credit card company. In the spring of 1950, McNamara and his friend Schneider invested US$10,000 to establish the "Diners Club" in New York, the predecessor of Diners Club. Diners Club provides members with a card that can prove their identity and payment ability. Members can use the card to record their purchases. This kind of credit card that does not require bank processing is still a commercial credit card.
In 1952, Franklin National Bank in California, USA, was the first financial institution to issue a bank credit card. In 1959, the American Bank of America issued the American Bank card in California. Since then, many banks have joined the ranks of card-issuing banks. In the 1960s, bank credit cards were quickly welcomed by all walks of life and developed rapidly. Credit cards became popular not only in the United States, but also in the United Kingdom, Japan, Canada and European countries. Since the 1970s, developing countries and regions such as Hong Kong, Taiwan, Singapore, and Malaysia have also begun to issue credit card services.
How did credit cards come about?
Credit cards, commonly known as "overdraft cards", mean that users do not need to deposit money first, but can enjoy advanced consumption by using the effective credit limit in the card to consume first and repay later. This will allow those "moonlight tribes" to continue consuming and increase their spending power. There is such a joke, two men walked out of the bar, one of them muttered: Without it, it is impossible to live; with it, life is not easy! Another man felt the same way and echoed: Yes, that's what women are like. The first person laughed: I'm talking about credit cards. The emergence of credit cards has completely changed people's consumption concepts and lifestyles.
Confucius, more than 2,000 years ago, once said that "the people cannot stand without trust" and "people cannot trust their friends without trust". The concept of "credit" has a long history in China. In China's private commodity transactions, "credit" and other methods often appear. "It is easy to borrow and repay, and it is not difficult to borrow again" is an example. In ancient times, the form of consumer credit was +++. Because +++ can easily cause social conflicts and conflicts, it has been banned by the government in some places. Beginning in the 19th century, Western consumer credit developed rapidly. After 1850, manufacturers began to sell expensive high-end goods through installment payments.
In the mid-19th century, a man named Morris invented a credit chip similar to a metal badge to flaunt the consumption concept of "enjoy now, pay later". This was the earliest credit card. Early credit cards were issued by retailers, department stores, oil companies, and airlines. They were issued to corporate sales targets, including customers with frequent business contacts and customers with business development potential. Credit cards can not only prove the identity of customers, but are also a way to attract and stabilize customers and increase turnover. The income of this kind of card is far better than expected, and it is gradually being used by more and more industries. However, this kind of card has its obvious limitations. It can only be consumed in one store and cannot be used universally.
As for the prototype of modern credit cards, it is generally accepted that the "diners club" appeared in 1951. It is said that one day, American businessman Fran McNamara ate at a restaurant in New York and found that he had no cash when he paid. Tongda's boss came to the rescue and said, "I know your credit has always been very good. Let's pay together next time." This embarrassing dining experience gave McNamara the idea of ??creating a credit card. In the spring of 1950, McNamara cooperated with his friend Snyder and invested US$10,000 to establish the "Diners·Club" in New York. The world's first credit card institution was born.
According to the idea of ??McNamara and his friend Snyder, they can create a third party that provides payment services between merchants and customers.
They hope to collect some fees from merchants to achieve profitability for card issuers, rather than charging fees from consumers and increasing the burden on consumers. They asked some restaurant owners whether they could support this approach, and only one owner expressed support, while most stores did not approve of this new consumption model. Although there were few supporters, McNamara and Snyder continued to explore and try. The two first targeted the catering industry in Manhattan. After repeated difficult negotiations with restaurateurs, they finally convinced a group of restaurants to accept this model.
The hard work paid off, and finally some merchants were willing to try using their credit cards. The earliest customers were a group of sales managers, who quickly accepted this credit method. Because this allows them to easily understand the entertainment expenses of their salesmen and control sales costs. After opening up in the catering industry, Diners Club quickly spread to other areas such as tourism. By 1951, the number of Diners Club members had exceeded 40,000, and there were merchants accepting Diners Club cards in many major cities in the United States. The model of Diners Club first advancing money for cardholders and charging merchants a handling fee is still used today.
To sum up, the operation and profit model of Diners Club is: (1) Diners Club signs contracts with different merchants to ensure that the credit cards issued by Diners Club are allowed to be used. A certain percentage (7%) charges merchant handling fees; (2) Diners Club issues credit cards to consumers for consumers to purchase goods and services, and Diners Club charges cardholders an annual fee ($18); (3) Diners Club Diners Club borrows money from commercial banks to pay consumers' credit purchases to contracted merchants. After the cardholders repay the amount of credit purchases, Diners Club will return this part of the funds to the bank. Less than a year after its launch, Diners Club processed US$3 million in transactions and made a profit of US$60,000 in March 1951 alone. By 1956, Diners Club's annual transaction volume exceeded US$290 million, with profits of US$40 million.
In 1958, American Express introduced the Express card. Unlike Diners Club, American Express is a century-old store in the United States. It started in the express delivery business in 1850 and became a well-known large company after World War II. Its most profitable business at that time was travellers' checks that were circulated around the world. At that time, many banks had launched bank cards, and in the tourism industry that American Express was good at In this field, Diners Club is also actively expanding the market. Under this situation, American Express had long planned to launch bank card business, but it hesitated because it was worried that it would affect its traveler's check business.
It is said that when he heard that Diners Club was planning to set up an international travel service network like American Express and issue traveler's checks, in order to prevent it from cannibalizing his own business, the president of American Express finally made a decision Determined to start a credit card business. Regardless of how the initial decision was reached, American Express quickly established itself in the business, relying on its reputation and broad customer base. When the American Express card was issued, more than 170,000 merchants signed up to join the network. Since then, with the addition of 150,000 cardholders and 4,500 member hotels of the American Hotel Alliance, American Express cards have gradually been accepted by the mainstream business community in the United States.
Also in 1958, even before American Express, Bank of America launched their first credit card. But instead of conducting a large-scale publicity, Bank of America conducted a market test in Fresno, a medium-sized city in California. Bank of America mailed a total of 60,000 Bank of America credit cards to nearly every household in Fresno. Unlike in the past when only a few wealthy people had access to credit cards, ordinary families in Fresno also had access to the cards and had thousands of dollars at their disposal overnight. In the second year of testing, purchases using America's credit cards reached $59 million, equivalent to $3.5 billion today.
Unlike Diners Club, Bank of America's credit card adds a credit rollover feature. Consumers who hold an Americas credit card can not only pay their bills just like using a Diners Club card, but they don't have to pay off the entire balance when they receive their bill at the end of the month. As a result, the unpaid balance on the card will automatically be rolled over to the next month. The bank charges interest on this balance, and the credit card has an additional way to make money. In fact, Bank of America's credit card combines two products: if you pay off the balance every month, this card is the same as Diners Club, but compared to Diners Club, cardholders have one more choice, that is, whether to pay it off or not. Pay the entire amount due and let the balance start rolling over as credit.
The emergence of the Bank of America credit card not only changed the composition of credit card users, but the "rolling credit" model it pioneered has remained as the core feature of credit cards to this day.
The origin of credit cards
Hello, credit cards The earliest credit cards appeared at the end of the 19th century.
In the 1880s, the British clothing industry developed the so-called credit card, and the tourism and business sectors also followed this trend. However, the cards at that time could only be used for short-term commercial credit, and the money still had to be paid as and when used. Long-term arrears were not allowed, and there was no credit limit.
In 1952, Franklin National Bank in California, USA, was the first financial institution to issue a bank credit card, becoming the first bank to issue a credit card.
That’s it for the introduction to the origin of credit cards.