The Credit Card Story - How credit card became part of our lives
We use a lot of this cards in the grocery stores, mall and even online, Debit, and Credit card aren’t new as most stores even use them more than collecting cash. As many as this cards tend to be, there are two among them which stand out is Visa and MasterCard, Verve is not really acceptable worldwide. The two companies have been able to spread their tentacles to both developed, developing and underdeveloped countries thereby shaking the industry.
A lot of people have mistaken this Cards for financial institutions, in fact, they believe the cards are responsible for the charges they receive after which they pay the bank but in reality, Visa and MasterCard are not financial organizations or banks, they do not handle your daily transactions and do not charge the consumer but rather, they are tech companies they do not get any dime from the interest removed from your account at the end of the month for credits or do not charge for anything related to your account. Only your banks can charge for this things. Visa, MasterCard and other cards only make money by charging the bank or the financial service issuing the card to its customers based on how often the card is used. So they are often charged with transactions in most cases and in some banks and countries, the bank then charges you additionally for ATM maintenance fee monthly.
The credit card story can date closely to the late 1800s when sellers started issuing cards to their loyal customers so they could purchase item on credit with the hope that they will keep buying from them and at the end of the month, the customers will pay back the credit they owed. This cards were called loyalty cards. As time goes on, in the 1950s, the Diners’ club card was invented and became acceptable card by multiple businesses to get eat out on credit. Soon banks saw a future in this and also saw it as a way to have loyal customers not going to other banks, so the banks started issuing charge cards to customers so they could get goods on credit and get debited at the end of a particular period for a certain time with no interest but also no roll overs.
Banks had a lot of difficulty at first just like every new innovation but one major difficulty was convincing merchants in different regions not using their banks to accept the cards but soon this whole thing almost ended as the Bank of America created the Bank Americard which was the first modern credit card which had a minimum balance, revolving balance and minimum payment. The card was acceptable as the bank had a larger reach and was acceptable by customers. Soon banks started paying Bank of America for issuing Bank Americard to their customers.
Soon a group of banks not connected to Bank of America decided to create a new credit card called the Master Charge to compete with the Bank Americard and so there became two strong name which people could not compete with. The banks which paid Bank of America to use the Bank Americard decided to create a company called National Bank Americard Incorporated and bought Bank Americard from Bank of America. With the hope to spread to other foreign countries, they decided to change the name and called it VISA. Also Master Charge became MasterCard. Till date, other cards like the American Express, Verve, and others have become something. Also, with technological growth, other functions like magnetic stripe verification and many more. Currently, Tech companies with App stores and other online stores now have their own credit cards like the Apple Pay and so on.
You can read more about credit/debit cards here. www.thestreet.com www.experian.com www.creditcards.com
