The History of Credit Cards Business Law II Chapter 33—Debtors, Creditors and Bankruptcy

Credit Begins Credit was first used in Assyria, Babylon and Egypt 3000 years ago. The bill of exchange (the forerunner of banknotes) was established in the 14th century. Debts were settled by one-third cash and two-thirds bill of exchange. Paper money followed only in the 17th century.

We Do The Same Today The first advertisement for credit was placed in 1730 by Christopher Thornton, who offered furniture that could be paid off weekly.

The Tallymen From the 18th century until the early part of the 20th, tallymen sold clothes in return for small weekly payments. They were called "tallymen" because they kept a record or tally of what people had bought on a wooden stick. One side of the stick was marked with notches to represent the amount of debt and the other side was a record of payments.

Forerunner of the Department Store Card In the 1920s, a shopper's plate - a "buy now, pay later" system - was introduced in the USA. It could only be used in the shops which issued it.

The First U.S. Credit Card Diners’ Club, founded by Frank McNamara First issued in 1950 Could be used only to cover restaurant bills

American Express Followed Diner’s Club But it was not introduced until 1958

Bank of America Issued BankAmericard later in 1958 Now known as Visa All the early cards were promoted to traveling salesmen for use on the road

Becoming More Common By the early 1960’s, more companies offered credit cards Advertising blitz focused on time- saving factor instead of being a form of credit Master Card became a huge overnight success

Congress Intervenes By mid 1970’s, Congress saw need to regulate credit card industry One major issue: mass mailings of active cards to unsuspecting consumers were banned