One of the most revolutionary inventions from the economic world is of course the credit card. In fact what began as a credit card has morphed into a variety of different formats and platforms for, quite simply, spending money. The concept has some cool and surprising origins and now has launched prep-paid, debit, and charge card concepts. Freelancers love a good start-up story, right? While this is everyday stuff for freelancers and self-employed people, we thought that in light of our new partnership with Visa we would take a look back on this story.
The term credit card was first mentioned in 1888 in the science fiction novel A Review from 2000 to 1887 by Edward Bellamy. The credit card idea originally came from the US (no surprise!) where credit cards have been around since 1894. The first was given to good guests by hotels. In the 1920s, oil companies and department store companies followed, other industries such as restaurant chains and airlines did not begin until after 1945.
These customer credit cards - today special credit cards (Proprietary Credit Cards) - enable credit purchases, performance now/ payment later, exclusively with the company that issued them. They should facilitate payment and consolidate brand or company loyalty.
Real credit cards - general-purpose credit cards - came a little later, again in the United States. These are issued to consumers with the appropriate creditworthiness and can not only be used for payment by one company, but also by everyone who has concluded an acceptance contract for the respective credit card. The first such universal credit card was that of the Diners Club, which was founded as a club in February 1950.
It should - as the name suggests - initially only from the club members - friends and acquaintances of the two founders Frank McNamara and Ralph Schneider - in about two dozen select New York restaurants to be used for dining on credit. But soon the narrow target group definition as well as branch and country boundaries were overcome. The next universal credit card in August 1951 was that of the Franklin National Bank at Rockville Center on Long Island, New York State. The primary aim here was to accelerate the consumer credit business and make it easier to administer.
The Visa credit card has its origins in BankAmericard, which was first issued by Bank of America in 1958. From 1966 on, this gave license agreements to other banks in the USA and in other countries. In the same year, Barclays became the first European bank to issue a credit card with the Barclaycard. In the same year, payment by Barclaycard was set up at around 30,000 contact points.
In 1970 the Visa credit card became independent nationally and in 1974 internationally under the name Ibanco, with all member banks represented. In 1977 Ibanco adopted the Visa name for all cards and activities.
Both Mastercard International and Visa International are no longer purely bank credit card organizations, but are also active in debit cards (Maestro/ MasterMoney/ MasterCard Electronic or Interlink/ VisaCheck/Visa Electron/ Plus/ V PAY) and ATMs (Cirrus/ Plus).