Believe it or not, the history of individual credit cards dates back to the days before cash money.

Ancient civilizations are believed to have used buy-now, pay-later arrangements. There are even records of loans that were made in 1800 B.C. by Babylonian priests. The consumer credit we’re most familiar with, though, didn’t emerge until much later.

Beginning in the late 1800s and early 1900s, several manufacturers are known to have extended credit to customers for large-ticket items.

The manufacturing boom of the industrial age made products so easy to produce that more demand was needed if companies were to stay in business. Offering credit was a way of generating demand and creating customer loyalty.

Charge plates and charge coins were becoming popular around the same time. Department stores and other merchants issued the plates and coins embossed with the customer’s name and address so that items could readily be charged to an account. It’s a far cry from today’s credit cards, but the concept was very similar.

John Biggins and the first low rate credit card

Then in 1946, a Brooklyn banker by the name of John Biggins introduced the world’s first bank card. The Flatbush National Bank of Brooklyn offered a program known as “Charg-It.” The bank’s customers could use the card at area retailers, and have the bill forwarded to Flatbush. The bank would then collect payments from its customers.

The Diner’s Club credit card offer

The next wave of invention came with the Diner’s Club card. As the story goes, a businessman by the name of Frank McNamara got caught without his wallet when the bill arrived at a restaurant.

Thinking there ought to be an alternative to cash, he and his partner, lawyer Frank Schneider, dreamed up Diner’s Club, which began signing up customers in 1950.

The Diner’s Club card was a charge card, not a credit card, since the entire balance was due when the customer’s bill arrived. The next evolutionary step came a few years later, when American Express issued their first card in 1958.

The Modern Low Rate Credit Card Emerges

In 1959, the concept evolved to include the credit cards we think of today, as lending institutions began allowing customers to roll-over their balances in exchange for a small percentage of “interest.”

The best credit cards still come with low interest rates, but the money credit card issuers make in interest payments alone these days would probably astound the inventor of charge cards himself, Mr. Biggins. The history of individual credit cards is long and evolutionary……..