For the last half a century, the small plastic credit card has been the standard of credit-based payment. But is the “card” in “credit card” on its way out? Recent developments such as online merchant account services, personal online payment providers such as PayPal, credit keyfobs that work with contact-free terminals, and chips that can be implanted into electronic devices such as cell phones, the future of the credit card is far from certain. Still, millions of businesses across America have installed those all-too familiar devices whose sole purpose is to read the magnetic stripping on the back of a flat plastic card, and a complete revolution from that system would be no small undertaking.
In 1946, long before there were magnetic strips and online merchant account services for credit cards, a Brooklyn banker named John Biggins created the Chard-It card, generally thought to be the founding father or credit card. As its name suggests, the Charg-It card was a charge card rather than a credit card, meaning the issuing bank expected (read: required) the customer to settle the account balance in full every month. It was not until over a decade later that the concept of rolling credit – giving customers the ability to spend beyond their monthly income by means of a revolving signature load – was introduced as the most revolutionizing addition to payment since American currency was standardized in the 1860s.
Today, the credit card industry is a nearly one trillion-dollar money machine that provides Americans with the spending freedom and convenience they want, and the security they need to feel like they would be able to handle emergency situations that may arise. Before credit cards, emergency situations such as automobile trouble, medical problems, or home disasters such as fires or floods left many Americans out in the cold, because they simply didn’t have the cash flow necessary to make large payments on a short notice. And the concept of making regular monthly payments to purchase something you otherwise couldn’t afford allowed Americans to live more comfortable and more luxuriously than ever before.
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