Credit Cards

Love them or hate them, odds are you have one (or seven) and they figure into your daily financial transaction/planning routine. Credit. It’s not free, no sir, but utilized correctly and responsibly credit cards can be quite valuable and beneficial. 

It’s hard to peg down when and where the first credit card was invented. Legend has it that in the 1920s oil companies and department stores began offering courtesy cards that customers could use to purchase items. The only merchants that accepted these were the ones that issued them (like department store cards today) and presumably there was interest applied but the details are hazy. 

Fast forward to 1952 and a gentleman by the name of Frank McNamara. Mr. McNamara started Diners Club with the dream of every New York restaurant someday honoring the card as a transactional unit. This was the first time a card had been issued across multiple merchants and levied a 7% fee to merchants on each transaction. McNamara’s pitch to restaurant owners – that 7% will be nothing compared to the amount of traffic cardholders will generate to the restaurant. And for cardholders, they could spend, spend, spend on the card for the entire month, no payment necessary. But at the end of each month full payment was required. No if’s, and’s or but’s. 

After just one year, Diners Club registered 42,000 members, and best yet for McNamara, no competitors. Months later Diners Club became the first internationally accepted card and McNamara and company held out as a virtual monopoly until 1958 when American Express and Bank of America hit the scene. After this, the race was on. Bank of America convinced merchants outside the restaurantbusiness to begin accepting the card which opened the floodgate to nearly every type of business in the country. A novel invention occurred in 1986 when Sears introduced the Discover card which provided customers a rebate on their purchases. This was the first “cash-back” idea put into motion and of course replicated extensively. 

We have been transitioning as of late into mobile payments with customers using a cell phone instead of a piece of plastic to purchase. McNamara probably never saw this coming but thanks to his vision hundreds of millions of people the world over now possess a financial tool that when used responsibly is a tremendous asset to the household.

Check out the reviews of the best credit cards to fit your needs here on Riffbuddy: Credit Cards