Ep. 44 – Card Based Transactions

https://api.spreaker.com/v2/episodes/51444627/download.mp3 This week I take a look at card based transactions and find out who invented the first credit card. Come along for the ride this week as I ask, card based transactions, how did that happen? The beginning: Money lending is one of the world’s oldest professions. In fact some of the earliest written laws pertain to the idea of lending. The concept of credit is goods are traded but the seller does not immediately receive payment. Instead, the debt is recorded and paid at a later date. Beginning as far back as 9,000 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. The concept of using a valueless instrument to represent banking transactions dates back thousands of years to a time when the ancient Mesopotamians used clay tablets to conduct trade with other civilizations. Early Modern Uses: The concept of using a card for purchases was described in 1887 by Edward Bellamy in his utopian novel Looking Backward.  Bellamy used the term credit card eleven times in this novel, although this referred to a card for spending a citizen's dividend from the government, rather than borrowing, making it more similar to a debit card. Early Charge Cards: Charge coins are probably the earliest modern predecessor of credit cards. These came to prominence in the 1860’s.  They would usually have some sort of words on their usually linking to whatever store or account they were connected to and usually only usable at one company or location. Charge coins were usually given to customers who had charge accounts in hotels or department stores. Which explains why department store credit is a thing. The people would come into the store and when they were about to buy something they would present the coin and the cashier would check the number against a ledger to make sure the account was up to date. These accounts were usually settled at the end of every month. Beginning in the late 19th century charge cards came in various shapes and sizes, made of celluloid (an early type of plastic), copper, aluminum, steel, and other types of whitish metals. Paper slips entered the mainstream as well serving the same purpose. In 1914 Western Union launched “metal money”. Gas companies  were next. They began offering credit cards that you could use to gas and maintain your car at their stations. 1936 American Airlines and the Air Transport Assoc. created the idea of credit for airplanes. They used a dog tag like product that was popular at the time.  They made it so the customer could sign a receipt for the flight in lieu of payment at the time and then pay it off later. doing this also took 15% off the price of the flight. 5 years later these dog tag credit cards accounted for half of their revenue. In 1946 John C. Biggins of Flatbush Brooklyn, NY created the idea of a universal credit card. He called it a charge it card.  The idea being that when the customer used the card the business would charge the bank who would then get the money from the customer.  When it started they only worked at businesses close to the bank itself. Bank of America was first out of the gate in 1958, mailing unsolicited credit cards to select California markets. In 1966, BankAmericard went national to become the nation’s first licensed general-purpose credit card.  By 1970 Bank of America has passed on ownership to a group of issuer banks that manage Visa. It went international in 1974 and issued its first debit card in 1975. Credit card, front. NU*84.17.10. Some of the original banks that went in on this agreement still have the original stock from their merger to create Visa. The Marquette Decision Have you ever wondered why some if not all your credit statem...