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Credit Card History

Credit cards have started to gain increasing popularity among the US consumers, which is suggested by the many statistics on the issue. They point out the almost every American now has at least one credit card, whereas some of them have started to accumulate many credit cards.

Credit cards do provide many advantages to their holders. However, most of them fail to benefit from them because of the balance they carry on their credit card every month and the finance charges as big as 23% at times. The truth is that too many people fail to resist the urge of using their credit card for purchasing things they don't really need or cannot afford.

Credit Card Explanation

We guess that there is almost no person who is not familiar with the way a credit card looks. But, just in case, it is made of plastic and its size is 3-1/8 inches by 2-1/8 inches.

The card contains such identification information as signature and/or picture. It gives the right to the holder named in the card to make payments for goods and services. Periodically, the charges from the account of the holder are made.

History of Credit Cards

The credit card was introduced in the 1920s in the United States. They were issued by individual companies for the use of their clients (for example by oil companies to sell fuel to the increasing number of automobile owners), who were given the opportunity to use the services and goods of the company-issuer on credit. Then in 1938 several companies began accepting each other's cards.

In 1950, the Diners Club Inc introduced the first card that could be used in different stores and businesses, known as universal credit card. The company charged its clients a fee every year for the use of the card. The billing of the card holders was done every month or year. In 1958, American Express was quick to enter the universal credit card business and offer its product.

After several years the credit card field experienced the introduction of the bank credit-card system. The Visa system evolved from the BankAmericard (as well as Chargex) created by Bank of America in 1958. MasterCard originated in 1966. During that same year the first credit card outside of the US was launched by Barclaycard in the UK.

When a sales slip is received by the bank, it credits the account of the merchant. At the end of the billing period the cardholder is billed the accumulated charges. The cardholder is required to make a payment of the whole balance or in installments each month, for which s/he is charged an interest.

Nowadays the basic concept of revolving credit for individuals has a great number of variations, including store cards, organization-branded credit cards, corporate credit cards, etc.

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