History of Credit Cards the First Issuers Essay

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History of Credit Cards

The first issuers of credit cards were post-World-War I-era merchants whose customers began arriving from more distant locales by the first automobiles that were widely available to ordinary Americans (Stephy, 2009). Originally, they were intended to allow customers to make payments on unplanned purchases without having to return to their homes to retrieve their cash or their checkbooks (Stephy, 2009). In issuing credit cards, department stores and hotels were actually following the practice first introduced in modern times by gasoline service stations; they began issuing credit cards precisely because their products and services were most in demand by consumers who were too far from home to expect them to go back home for their money (Woolsey & Starbuck-Gerson, 2009). Initially, those credit cards were issued by individual gasoline companies and they were only good for those specific chains (Woolsey & Starbuck-Gerson, 2009). Even that practice had much earlier roots, dating the better part of a century to the informal practices between some merchants and their regular customers (or between wholesalers and retailers) to issue one another "credit" for purchases to be paid in full after the transactions (Woolsey & Starbuck-Gerson, 2009).

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Several decades later, during the post-World-War-II industrial boom, credit cards became much more common (Stephy, 2009), beginning with the very first bank card issued in 1946 by a Brooklyn, New York banker named John Biggin (Woolsey & Starbuck-Gerson, 2009). Biggin's card was much more restrictive than modern credit cards because it was only available for customers who maintained bank accounts at the issuing bank. Still, in principle, they worked the same way as modern credit card: namely, customers presented their cards to merchants and the banks guaranteed the payment to the merchant and then settled up the account later with the customer (Woolsey & Starbuck-Gerson, 2009). Several years later, in 1950, Diners Club began issuing the first credit card that….....

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"History Of Credit Cards The First Issuers" (2012, November 10) Retrieved May 18, 2024, from
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