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Brief History of Credit Card Use

by on August 26, 2008

If someone asked you when we started to use credit cards, what would you say? Most people believe that credit cards were only invented in the past fifty years. To some extent, it’s true that the modern methods of using credit cards in the United States weren’t popular until relatively recently. But did you know that the basic foundation of credit card use was around even towards the end of the nineteenth century?

Here is a brief timeline and history of credit card use in the U.S.:

• 1887. A novel called “Looking Backward” by Edward Bellamy was published which basically discussed the use of credit cards in a way that is fairly common today. Even the term “credit card” was used repeatedly in this novel. It is considered the precursor to modern credit card use and information.
• 1914. Western Union invented what was basically the first charge card for its customers to use.

• 1920’s. Credit cards began to be used in one form by gas stations which allowed customers to purchase gas on the cards.

• 1950’s. Several different companies started accepting the credit cards of other companies at their places of business which initiated the model of credit cards used today in which the same credit card can be used at more than one location. Prior to that all credit cards were more or less like the department store cards used today that can only be used at a single store.

• 1958. American Express created what was basically the first credit card that could be used worldwide.

• 1960’s. This era saw the development of the credit cards that we are familiar with today including the Visa card, the MasterCard and the CitiBank card. They aren’t the same today as they were then but these credit cards couldn’t have developed without being launched at this time.

• 1980’s. Widespread use of credit cards begins to be commonplace among all different types of consumers.

• 1990’s. There is a focus on specialty credit cards including rewards credit cards and credit cards for businesses.

• Twenty-first century. Credit cards are continuing to change and grow even now. Charity rewards cards and green credit cards are becoming popular, gas rebate cards have seen a revival and there is a big focus on the personalized design of each credit card that a consumer owns.

The history of credit cards isn’t exactly a long history but it is one that steadily developed throughout the twentieth century to become what it is today. It is interesting to know that the idea for the credit card more or less came from a novel dating back many years before the credit card itself was actually launched. And it’s interesting to see that some of the same cards that were around in the early days of credit cards (such as cards specific to one gas station) are types of cards that are still around in a more modern form today. You certainly don’t have to know the history of credit cards to be able to use credit cards in your daily life but having an understanding of them can give you a perspective on their role in our society which can make you a more responsible user of them.

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