Christine Turek What is Credit The ability of a customer to obtain goods or services before payment based on the trust that payment will be made in the future Money A medium of exchange for goods or services within an economy ID: 792441
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Slide1
The history of
Credit and Credit Cards
Christine Turek
Slide2What is Credit?
The ability of a customer to obtain goods or services before payment, based on the trust that payment will be made in the future.
Slide3Money
A medium of exchange for goods or services within an economy.
Slide4Before Credit Cards
Layaways
– The store “lays” the item “away” until payment is completed. Customers with low income would use this for large purchases. If unable to fully pay, the customer’s money may be given back, usually less because of a fee.
Tab
– Customer can make a purchase and pay later. The store keeps a record of expenses for the customer to pay at a later time.
Slide5Before Credit Cards
Charge Coins
– Department stores first issued these in the 1860s.
Charge Plates
–
Department stores also issued these. They were also called
Charga
-Plates
Late 1800s & early 1900s
Slide6Before Credit Cards
Gasoline Cards
– Gas companies offered paper cards to its customers
Early 1920s
Slide7Before Credit Cards
Charge-It
– Launched in 1946 by John Biggins that let customers charge purchases from local merchants in his neighborhood.
1946
Slide8First "Credit" Card
1950
The Diner
s’
Club
– The first credit card in widespread use. Started by Frank McNamara and Ralph Schneider in 1950.
Slide9More Credit Card Companies
1958
American Express Company
– In 1958 they created their own charge card for travel and entertainment expenses.
Bank of America
– Also launched their own credit card around this time, later would be known as
Visa
in 1976.
Slide10Interbank Card Association
A group of 14 banks came together and formed the Interbank Card Association in 1966. They created the card MasterCharge, later known as
MasterCard
.
1960s
Slide111960s & 70s
Paper to Electronic
Air Travel Cards
– Early example of a card that could be used to make charges at multiple store. It was first launched in 1963. Later in 1969, it became the first card to include a magnetic stripe.
Slide12Slide131970
Credit Card Legalities Through the Years
Fair Credit Reporting Act
– Credit reporting companies and others that send credit information had to follow guidelines and fix any mistakes on a consumers’ credit report. Consumers have the right to receive a copy of credit report and can challenge the company for inaccurate information on the report.
Slide141974
Credit Card Legalities Through the Years
Equal Credit Opportunity Act
Companies issuing credit cards can not discriminate based on gender, martial status, race, religion, national origin, age, and others.
Slide151974
Credit Card Legalities Through the Years
Fair Debt Collect Practices Act
– Put a limit on how debt collectors could contact consumers. It protects against harassment, bans contact with consumers at inconvenient times, and consumers can ask for proof that they owe money among other things.
Slide161974
Credit Card Legalities Through the Years
Supreme Court Ruling of 1978
– Credit card issuers “export” nationally whatever interest rate was in the state they were located from.
Slide171980s
Reward Programs
Slide181980s
Reward Programs
Discover
– Launched nationally in 1986 by Sears. Unlike MasterCard and Visa, they did not have annual fees, had higher credit limits, and had “cash-back bonuses”.
Slide19Why bother with Reward Programs?
It is an incentive to attract more customers and make more money. The customers make more purchases so that they can earn more rewards.
Some common rewards include: cash back, hotel and travel points, gas points, airline miles, sign-on bonuses.
Slide20Slide21Modern Credit Card Trends
Mini Cards – Small credit cards that could fit on a keychain. They launched in 2002. People liked how convenient they were.
2000
s
Personalized Credit Cards
– Started by Capital One in 2007, it let people choose what background they wanted on their cards.
Slide22Transition from Magnetic Stripe to Chip Reader
2015
EMV
–
E
uropay
,
M
astercard
, and
V
isa. The global standard for cards with computer chips and the technology used to authenticate chip-card transactions. It reduces fraud because every time the card is used, it creates a unique transaction code that cannot be used again.
Slide23Modern Ways of Payment
Google Wallet – Started in 2011. Phones had to have near-field communication (NFC) chips. Merged with Android Pay and became Google Pay.
2010s
Apple Pay
– Started in 2014.
Apple Wallet
– Started in 2012.
Walmart Pay
–
Started in 2016
Slide24What about Walmart?
Walmart MasterCard
Walmart Credit Card
Cash Back Benefits
3% - Walmart.com
2%-
Murphy’s USA & Walmart gas stations
1%- where MasterCard is accepted
3%- Walmart.com
2%- Murphy’s USA & Walmart gas
stations
1%- Walmart, Walmart Supercenters, Neighborhood Markets & Sam’s Club
Annual Fee
$0
$0
Annual Percentage
Rate
18.15%-24.25%
24.15%
Late Fees
Up to $38
Up
to $38
https://upgradedpoints.com/walmart-credit-card-review
Slide25Credit Card Debt
Slide26Slide27Then and Now
Slide28MacDonald, Jay, and Taylor Tompkins. “The History of Credit Cards (Timeline & Major Events).” CreditCards.com
, Creditcards.com, www.creditcards.com/credit-card-news/history-of-credit-cards.php.Smith, Ernie. “Give Us Some Credit: The History of Credit Cards.” Tedium: The Dull Side of the Internet., Tedium: The Dull Side of the Internet., 7 Apr. 2018, tedium.co/2015/06/09/credit-card-history/.
Tsosie, Claire. “What the First Credit Cards Like.”
NerdWallet
, Nerd Wallet, 2 Sept. 2016, www.nerdwallet.com/blog/credit-cards/first-credit-cards-like/.
Hur
, Johnson. “History of Credit Card Processing.”
Credit Card Beginning
Til
Now
,
BeBusinessed
, 6 Sept. 2017, bebusinessed.com/history/history-of-credit-card-processing/.
Tellefsyn
, Robyn. “A History of Credit (and How to Manage Yours Better).”
SoFi
, Social Finance, 13 Sept. 2018, www.sofi.com/blog/personal-loan-history-of-credit-cards/.
“The Story Behind The Card.”
Diners Club - Company History of Diners Club
, BMO Financial Group, www.dinersclubus.com/home/about/dinersclub/story.
Works Cited
McKinley, Ed, and Josephine Rossi. “A Brief History of Mobile Wallets.” Electran.org, ETA, 2017, www.electran.org/publication/transactiontrends/a-brief-history-of-%E2%80%A8mobile-wallets/.