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BC—Before Credit Cards

Once upon a time, there was a busy mom who needed groceries, but she couldn’t shop that day. She had no money left in her bank account.

Why didn’t she use her credit card, you ask? There was no such thing at that time.


Believe it or not, there was a time not that long ago when people couldn’t buy anything if they didn’t have the money to pay for it—unless the store owner kindly allowed them to pay later. They’d count out pennies and refigure numbers over and over in the checkbook to decide if they could afford an item before purchasing.

Today, if we need automotive repairs, new shoes for our son, or dental work—we charge it. In fact, a good many of us charge everything we purchase. And few pay that debt off each month when the bill arrives.

Throughout history, there was some sort of credit extended where a creditor allowed buyers to take home a product and pay them back later, typically with an additional charge. Sometimes, however, it was just considered good business. When I was in high school I worked at a neighborhood grocery store. The owner’s office was covered in notes taped to the wall above his desk with IOUs from customers who owed him for groceries. Often, a child was sent for a few items and the mom would just pay the next time she went in.

From the 1800s to 1930s consumers had small coins or charge plates marked with their identification. They’d show their coin or plate to the cashier when they checked out and that information was marked on their receipt.

The coins and charge plates were replaced in the 1930s with the Charge-Plate, a small rectangular sheet of metal embossed with the customer's name, city, and state. It was similar to a dog tag. A paper card was on the back with the customer’s signature. Oil companies issued their own cards beginning in the 1940s as did major domestic airlines in the United States. Use of these cards, as well as ones issued later by department stores, were limited to that specific company.

In 1946 John Biggins, a Brooklyn banker, offered his customers a card to use for credit. A similar card was later offered in 1951 for New York’s Franklin National Bank customers.

Frank McNamara is credited with the development of the Diners Club Card when he could not pay his dinner bill at a restaurant because he had forgotten to bring his wallet. He offered the restaurateur an IOU on a small cardboard card. The Diners Club Card was soon used for travel and entertainment at numerous locations. Carte Blanche and American Express cards followed. The first cards made from plastic came out in 1959.

Bank of America, later known as VISA, offered the first general purpose card in 1966. Banks joined together and created InterBank Card Association, now known as MasterCard.

These early charge cards only allowed credit for a month. Consumers were required to pay in full when they received their bill. It wasn’t until 1987 when American Express issued a credit card allowing customers to make monthly payments. Around this time the general public commonly began carrying cards in their wallets.

As with every new innovation, there are pros and cons. Credit’s allowed the public to get our medical care, automotive repairs, and college education in addition to the zillions of things we think we need from ice cream to manicures. On the other hand, our lives now include credit card fraud and debts that become impossible to pay off.

According to an online calculator, if we only made the minimum payments on a $5,000 charge, it would take 12.5 years to pay it off. The total interest paid would total $2,916. If the charge was $10,000, it would take 14.8 years to pay the debt with an interest payment of nearly $6,000.

Like calories in our bodies, it’s so much easier to put the dollars on the card then it is to take them off.

©2015, Mary K. Doyle

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