Credit cards

The credit card is a financial tool which got its name from the latin word "credo" which means to trust, commit or to believe. Credits cards allows individuals or even small businesses easy access to needed funds without ever seeing the physical representation of the value being transacted in the form of printed currency. It is in a way a perfect example that money is not backed by any precious metal but the trust between the trading parties that the stated value will be honored everywhere. Early concepts for a charge card leans toward a socialist society. This concept dates back in 1887 by an American novelist Edward Bellamy. The title of the book is looking backward. In the book, the year was 1887 and Julian West finds himself waking up 113 years in the future in the year 2000. In his journey, he was shown around by a friend named Dr. Leete who becomes his guide into explaining the technological and the economic system in a fictional year 2000. The book clearly discredits the benefit of the stock market and describes the use of the credit card issued by the government to individuals based on their output capabilities. The people went to central warehouses kind of like how walmart or target is for goods using government pasteboard credit cards issued to them. Of course, each person can only acquire as much items based on the credit value on their cards.

Fast forward to the real world, the credit card proved to be a major capitalist tool. Local business establishments in the early years of the 20th century issued out credit cards for their customers. However, those cards would not be honored anywhere else and the first credit card available to the public and accepted in a number of establishments was issued out by Diners club in 1950. This charge card as the name implies, was only available at selected fine dining restaurants in the United States. The card's target market are businessmen and soon expanded to accomodate entertainment and travel expenses. At first, the cards were pasteboards and later on, the credit company issued plastics. Diners club was later acquired by Discover Financial services on July 1, 2008 the company behind the Discover card.

In 1958, American Express a company popular for its traveller's check services started the process of issuing their own credit card to the public. The popularity of the credit card gained the attention of some US banks like Bank of America who realized that banking institutions are losing influence over non-bank credit card issuers. In the same year in September 1958, Bank of America introduced their charge card and other smaller banks joined forces and named it BankAmericard system. The popularity of Bank of America in the country especially in the state of California where it is headquartered soon made it the biggest credit card issuer in the United States. This card system was later renamed as Visa.

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In the same state of California in 1967, several other banks outside the Bankamericard system alliance formed their own charge card and named it Mastercharge. Wells Fargo, United California, Bank of California and Crocker National bank were the original banks who forged the Visa competitor MasterCharge and was later renamed Mastercard. For more on how credit cards work go here.
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