They are small and are taken for granted. We all do it. They are just there. Little pieces of plastic tucked away in millions of wallets and purses. That’s right, the credit card; considered by many to be the greatest invention and by others, the scourge of humanity. The credit card, an unusual and mysterious item. What do we really know about them, though? Here are seven little known facts, at least by most of us, about our little plastic banks hanging out in our back pockets.
When was the credit card invented?
According to historian Jonathan Kenoyer, the use of credit has been around for a very long time, dating back 5000 years. According to Mr. Kenover, a renowned historian, the ancient Mesopotamians used clay tablets to keep record of transactions with the Harappan civilization. He further goes on to explain that this system of ‘credit’ was vital to business transactions because it was not practical or safe to be travelling with the large amounts of money needed to conduct many of these business deals.
When what the first credit card issued?
The first modern iteration of the credit card was issued in 1950 by Diner’s Club. The brainchild of Frank McNamara, this cardboard based card became wildly popular to stave off paying immediately for bills associated with travel and entertainment. Story has it that the idea for the card came about because Mr. McNamara, one night while out for dinner, had forgotten his wallet! It was so popular, that by 1951 Diner’s Club had 20,000 people that carried the little gem.
When did credit cards start being produced in plastic form?
The use of plastic to make credit cards started in 1959 issued by American Express. Within five years, American Express had 1 million issued cards used by 85,000 merchants domestic and abroad. However, American Express has had a long history in the credit experiment, starting as far back as the 1800s. In 1882 American Express introduced the money order and then in 1891, the traveler’s check was born.
When did the magnetic stripe appear on credit cards?
In 1969 the first magnetic stripe on the back of the credit card made its appearance. It was introduced by IBM and had been the verification of choice for nearly 40 years. According to the IBM website, engineer Forrest Parry is credited with developing the idea of affixing a piece of magnetic media to a plastic card. However, he was stumped by how exactly to get the tape to stick to the plastic. That is until one day while telling his wife of the problem, she suggested to melt the tape to the card like ironing it. Which he did!
When did travel rewards begin their association with credit cards?
In the 1980s, airlines started offering frequent flier programs to their customers. In 1986 the first ‘cash back’ programs were introduced by Discover Financial Services. Then in 1987, credit card issuers began their own reward programs that include frequent flier miles as well as a wide array of other perks.
When did the use of the EMV chip happen?
The use of EMV chips began in 2015 in the United States. However, the earliest version of the EMV system began in Europe in 1994. The driving force behind the movement to have EMV technology embedded in credit cards was incorrectly attested to being legal issues. That was not the case. It was the credit card companies themselves pushing for this change due to transaction security reasons. You see, when EMV is used at the point of purchase, a unique code for that transaction is created and that code cannot be used again.
How many credit cards are there?
Reports show that in 2018, there were 639 million credit cards issued. Surprisingly, that is a slight decrease since 2017, which saw credit cards in circulation totaling at 1.06 billion. However, an increase is projected for 2020 with approximately 1.2 billion credit cards to be in circulation. The number of actual card holders in 2017 totaled at 180 million; whereas, it is projected to increase to 191 million by 2022.