If you’re like me, you rarely give your credit cards a second thought, you just take advantage of the convenience.
However, after not being able to use them in some big cities on our recent trip to China, I developed a new-found appreciation for their convenience.
I remember when I was offered my first credit card - a BankCard in late 1974.
Virtually anyone who wanted one received a BankCard, and many people who didn't want one received one unsolicited in the mail.
Before 1974, only store cards, Diners Club and American Express were available in Australia but these were either restrictive or only accessible to the wealthy.
The use of BankCard grew slowly as more merchants accepted it.
Initially it could only be used in Australia, but it eventually its use spread to New Zealand.
In the first decade after its introduction, Bankcard dominated the Australian credit card market, with more than 5 million cardholders at its peak in 1984.
However as a result of a declining cardholder base, falling transaction volumes and shrinking market share in relation to internationally accepted credit cards such as VISA and MasterCard, which were introduced to Australia in he early 1980's, the card was withdrawn from use in 2006.
I now use credit cards to pay for almost everything, but naturally, I also make sure to pay off my balance in full every month to avoid paying interest.
Some more credit card facts:
Anyway, thinking about all this lead me to look up a few more facts and here's what I found about credit cards at Len Penzo's personal finance blog:
1. In 1950, Diner’s Club became the first company to offer a credit card that could be used at multiple locations.
Initially the credit card was accepted at just 14 restaurants in New York.
Even so, within a year, over 20,000 people were using it.
2. Diner’s Club founder, Frank X. McNamara, came up with the idea one evening after dining at a restaurant — and realizing he had forgotten his wallet.
3. By 1952, Diner’s Club was being accepted by 400 restaurants, 30 hotels, 200 car rental agencies and 4 florists.
Even so, McNamara, thinking credit cards were just a fad, sold his share of the company that year for $200,000 — that’s equivalent to roughly $1.6 million today.
4. Unfortunately for McNamara and his heirs, credit cards weren’t a fad.
Around the world, there are now 10,000 credit card transactions made every second.
5. Today, Americans have an astounding 609.8 million credit cards in their wallets.
If all those cards were stacked up, they would create a tower 288 miles high.
6. In 1958, Bank of America launched the first general purpose credit card by mailing 60,000 real BankAmericard credit cards to the good folks in Fresno, California.
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That unsolicited credit card “drop” was the brainchild of bank employee Joseph P. Williams.
7. By October 1959, two million unsolicited Bank Americards had been “dropped” throughout California.
Unfortunately, the obvious loose lending standards imposed by Williams’ ingenious marketing strategy resulted in more than one of every five accounts being delinquent; credit card fraud caused even more problems for the bank.
As a result, Bank of America initially lost $8.8 million on the launch of its new credit card — and Williams lost his job.
8. In case you’re wondering, the first BankAmericards were made of paper and had a credit limit of $300.
The terms and conditions also held the cardholder liable for all charges — including those resulting from fraud.
9. Today, US federal law states that your maximum liability for unauthorised credit card use is $50 per card — and $0 for any charges that accrue after you report a card lost or stolen.
10. MasterCard introduced the first credit card hologram in 1983 to help thwart counterfeit credit card operations.
11. In 1976, BankAmericard changed its name to VISA and in 1979 a rival card Master Charge changed its name to MasterCard.
12. American Express introduced the first credit card made of plastic in 1958.
They also introduced the first credit card made of anodized titanium: the highly-exclusive Centurion card (informally known as “the black card”).
This card has an annual $2,500 fee, and a one-time initiation fee of $5,000.
13. Most credit cards have 16 digits in their numbers and the first digit in the string is an identifier that denotes the type of industry that issued the card.
Although the first six digits of your credit card number are known as the Issuer Identification Number, you don’t need all six digits to necessarily tell what type of card you have.
For example, cards that start with 34 or 37 are American Express. Visa cards start with a 4, and MasterCards start with numbers between 51 and 55.
Digits 7 through 15 make up your personal credit card account number.
As for the last digit, it’s a special number known as a “checksum” that’s used to make sure your credit card number is not invalid via a cleverly simple math trick known as the Luhn algorithm.
14. Here’s another math trick: Assuming you have a credit card balance of $2500 with an interest rate of 18%, and only make minimum payments equivalent to the interest for the month plus 1% of the balance, it will take you 17 years to pay it off at a total cost of $5673.22.
Of course, that’s only true if you also cut up the card and never use it again.
I bet the credit card companies wish you didn’t know that.