Prior to plastic, money as a means of exchange for goods and services was cumbersome, if not outright dangerous. Beginning as far back as 9000 B.C. with cattle and camels, currency took some truly odd shapes, from cowrie shells, bronze and copper imitation cowrie shells and gold and silver nuggets to Chinese deerskin notes and Native American stringed wampum beads.
From the beginning, credit cards offered significant advantages over all forms of money: They’re pocket size, easily portable, relatively secure and have no intrinsic value in themselves. What’s more, true credit cards buy you time to pay your bill, typically with a modest fee attached.
Here’s a brief look back at the fascinating evolution of the credit card:
The dawn of credit cards
According to historian Jonathan Kenoyer, the concept of using a valueless instrument to represent banking transactions dates back 5,000 years, when the ancient Mesopotamians used clay tablets to conduct trade with the Harappan civilization. While still cumbersome, a slab of clay with seals from both civilizations certainly beat the tons of copper each would have had to melt down to produce the coins of that era.
Fast-forward to America circa the 1800s. During westward expansion, merchants would use credit coins and charge plates to extend credit to local farmers and ranchers, allowing them to forgo paying their bills until they harvested their crops or sold their cattle.
In the early 1900s, a few U.S. department stores and oil companies took credit one step further by issuing their own proprietary cards, the precursor to modern-day store cards. Such cards were accepted only at the issuing merchant and designed less for convenience than to promote customer loyalty and improve service.
Bank-issued charge cards originated in 1946 when a Brooklyn banker named John Biggins launched the Charg-It card. Charg-It purchases were forwarded to Biggins’ bank, the middleman that reimbursed the merchant and obtained payment from the customer in what came to be known as the “closed-loop” system. Purchases could only be made locally and only bank customers could obtain a Charg-It card. Five years later, New York’s Franklin National Bank followed suit, issuing its first charge card to its loan customers.
With postwar America on the go, two dining and entertainment charge cards quickly followed.
The Diners Club Card, which debuted in 1950, was inspired a year earlier by an “a-ha” moment when a customer named Frank McNamara forgot his wallet…