Throughout history, people needed a way to make purchases, even if they did not have the full value of the purchase price. Today, people everywhere are using credit cards for the same reason: to make purchases using payment installments when they do not have the full amount. In fact, according to a recent Federal Reserve survey, US Consumers own over 609 million credit cards. The average debt per US family is over $8,000.
Ancient Credit History
While people living in 9,000 B.C. were known to barter, or exchange goods as money, the first notes of credit appeared in the ancient Middle East and North Africa, with Assyria, Babylon and Egypt being cradles of industry and commerce. This is particularly remarkable considering the first use of minted currency wasn’t until 1,000 B.C.
Fast forward to the dark ages, starting in the 1300’s. Not only was the earth consumed with wars and plaques, but credit notes began to be used in Western Europe as a means to settle debt. These bills of exchange, the forerunner to banknotes, represented 2/3rds repayment, with cash being the remaining 3rd.
Credit Use in the Modern Era
In the bustling 1600’s, the use of paper money became widespread, thanks in part to the advent of the printing press. By 1730, advertisements for “store credit” started to appear, with the first attributed to Christopher Thornton and his furniture store. This credit was in the form of a weekly installment loan. During the 1800’s, tallymen became well known as the men who kept records of people's debt, and by 1890, the first reference to a credit card is used in Europe.
By 1920, thanks to the industrial revolution and the accompanying migration to cities, shoppers around the United States could “buy now” and “pay later.”
Leading From the 40’s to Present
In 1946, less than a year after the end of the Second World War, John Biggins introduced the country’s first bank card. A few years later, Diners Club introduced the first modern credit card to a group of 200 people. This card could be used at 27 restaurants – a high number at the time.
1960 saw London’s Transit Authority install magnetic strips for riders of the Tube, and thus paved the way for credit card companies to use this technology as well. Just a decade later, as the information age began, these strips were the standard all across the Western world.
Today, almost everyone has a credit card. And almost everyone carries too much debt as well. Maybe it’s time to get out of debt and get rid of those cards?