In the 1920s, a significant shift in the tech world began, one that continues to shape life today, setting the stage for modern payment systems and the way consumers access credit.
In the United States, companies in the oil trade and the hotel sector began issuing credit cards to customers, extending a branded payment option directly linked to the businesses that served them.
That made a significant shift not only in the tech world. It also created a considerable stride in affecting the USA’s economy. Read on to learn about the history of credit cards and how their use today differs from their initial launch.
First Idea of Credit Cards
The first idea of credit cards emerged in the 1790s. It was not a card in the modern sense; rather, it functioned as a basic credit system used for purchases.
During those times, farmers could get seeds on credit, and they would then pay for them after harvest. This was just in the early years, though, and that’s how far credit cards can be traced. That was before the merging of the credit and the card happened in the 1920s.
The Great Merge
The merging of credit and cards became known as the great merge. Companies pushed for it, needing a faster way to identify customers and tie transactions to individual accounts at the point of sale.
They realized the job was best handled by a portable, physical object. Sometime between the 1920s and the 1930s, credit was formally merged with a card that each customer could carry.
Early Years of the Credit Cards
In the early years of the credit card, it was mainly used by specific companies to help their customers finance their purchases. For example, if you did not have enough money to pay for gas and you had the company’s credit card, you’d still be able to buy gas.
It served to ensure loyal customers did not go without the products they wanted from that company. It also operated as a retention strategy, encouraging repeat business and keeping customers tied to one brand.
The Evolving Card
At some point, everything has to evolve and match the changing times. With credit cards, it wasn’t any different. With the ever-changing tech world, the changes have been meteoric.
In the 1920s to 1930s, metal coins and medals quickly evolved to rectangular metallic cards. These cards were primarily used to pay for gas and hotels for the specific hotels that offered the service.
In the 1940s, the trend continued with rectangular metallic cards, but there was a huge step forward. The airlines joined suit and started allowing travelers to purchase a ticket using credit cards.
In the 1950s, the card made a large change in appearance, as most companies began using plastic cards. This was also when most merchants started offering their services to credit cardholders. It was no longer just for a few clients to be used on specific companies, but really for anyone.
In the 1980s, the tech world evolved again, adding the magnetic stripe to the back of cards. Only specific computers could read the strip, and it also made the card more secure.
And finally, in the 1990s to 2010s, credit cards evolved to include EMV chips and mobile wallets to enhance growth further. The ease and accessibility of credit cards have never been greater than they are today.
Conclusion
Credit cards are ingrained in modern-day economics but many cardholders have no idea of the changes the cards have undergone over the years. Using credit cards today is simple, fast and hassle-free. They have come a long way since they first appeared in history.
