One morning in September 1958, residents of Fresno, California, USA received a letter from Bank of America in their mailboxes. There was a plastic card in the envelope and attached There are instructions for use, which say that with this card, citizens can not only spend money on credit in stores, but also do not have to pay off the entire loan at once. More than 60,000 residents in the city received this strange card. For a time, the small card sparked a heated discussion in the city. People affectionately called this delivery the Fresno Big Delivery. Fresno residents The strange card I received is the credit card we often use today, but in 1958, credit cards were still a novelty to Americans.
The idea of ??credit cards originated from an American businessman named Frank McNamara. Once, he forgot to bring money when entertaining guests, so he had to call his wife to settle the bill. This embarrassing experience Jean Franco came up with the idea for a credit card.
In the spring of 1950, he and his friends founded the Diners Club in New York and issued the Diners Club credit card. In the Diners Club, members can record any amount they want with a card that can prove their identity and self-payment ability. You can use the account to consume and repay all the expenses when due. In order to attract more customers, some catering, entertainment and gasoline companies have also begun to issue Diners Club cards.
By 1965, Diners Club’s transaction volume was close to 300 million U.S. dollars, and its number of special merchants reached 9,000. Despite huge profits, the promotion of Diners Club still faced huge difficulties. Without the support of financial institutions, Diners Club’s The card can only be used for credit purchases, not loans. Not only that, you also need to prove your ability to pay if you want to apply for the card. For ordinary citizens, the threshold is too high and it is difficult to popularize it.
Before 1958, many banks in the United States tried to promote credit cards, but they all failed one after another. This time the Bank of America credit card thing is different from the past. Bank of America promises that not only can you use this credit card to consume on credit, but more importantly, you can continue to use it as long as you pay a certain fee every month. You don't have to pay it off all at once. The balance will be rolled over to the next month, and the bank will charge interest. Today, when credit cards are ubiquitous, this rolling credit function seems to be a matter of course, but at that time, it was an unprecedented innovation. The idea was proposed by Joseph Williams, director of R&D at Bank of America. Williams believes that The emergence of credit cards is not accidental.
In the 1950s and 1960s, the U.S. economy entered a golden age. Optimistic estimates of the economy and income would greatly stimulate consumption. Credit cards could satisfy people's fanatical desire for consumption. So he successfully persuaded the bosses of Bank of America to let them trial credit cards in Fresno. Fresno has a population of 250,000. Bank of America controls 45% of the market share. With such a market space It is enough to create economies of scale for credit card consumption.
After the Fresno big delivery, Bank of America extended its business tentacles to the entire California. In less than a month, almost all Californians with good economic conditions received credit cards from Bank of America. Bank of America suddenly added 2 million users and 20,000 online merchants. The magic of credit cards began to work, and in the second year of the big drop, people spent $59 million on purchases using Bank of America cards.
At this time, Bank of America was immersed in the success of credit card promotion and ignored the risks that were coming quietly. Credit card defaults became a chronic headache for Bank of America. Due to the estimation of the quality of the people at that time Too optimistic, Bank of America did not set up a dedicated collection department. By December 1959, 22% of customers were behind on their accounts, so much so that California courts had an additional job to deal with credit card fraud.
During this great leap forward, Bank of America suffered a total loss of US$20 million, and Williams was forced to leave Bank of America. However, the revolutionary payment method of credit card seemed to be about to fail. .
Fortunately, Bank of America, which had suffered a lot, did not lose confidence in credit cards. They realized that risk management of credit cards was an indispensable key link, so a complete set of credit card risk management systems was gradually established. In order to share risks and expand the scope of credit card use, they began to invite other banks to jointly operate American Bank cards.
By 1970, major banks in the United States had issued about 100 million credit cards. Not only that, the use of credit cards also expanded to Canada and the United Kingdom. In 1975, Bank of America adopted a new name, Visa, and became the world's largest credit card organization at that time. Credit cards put banks in everyone's pockets, revolutionizing people's lifestyles and consumption habits, and greatly Consumption stimulated by the land has led to rapid economic development.
Credit cards are now used in more than 95 countries around the world. In the United States, more than 80% of consumers use credit cards to make purchases. Credit card transactions exceed 14 trillion US dollars every year, accounting for more than 20% of retail sales. Credit cards make a person Future income is directly converted into currency that can be used today. A small card condenses the creativity and vitality of capital.