America's Magic Wand: the Credit Card
Contributed by Jessie Hart
The Advent of the Credit Card
How old exactly is the credit card? The idea of "buy now, pay later" has been around as long as business itself. Every culture had its own version of the credit system. The advent of the actual credit card was in 1951. Diners' Club issued a card to two hundred bearers who could use it in 27 restaurants in New York City. Over the following decade, financial institutions such as American Express, Visa and Mastercard pioneered their own versions of the credit card.
However, this form of plastic money did not become widespread until the 1970s with the standard of the magnetic strip which allowed easier processing and helped to guard against fraudulent charges.
The Credit Card in the "Charge-it" Society
The average American family has not one, not two, but eight credit cards and holds a credit debt of about $8,000. Out of 144 million Americans who have general, all-purpose credit cards, only 55 million pay their bill in full each month. 35 million pay only the minimum required per month.
Instead of using the credit card in place of cash that you left at home or in the bank, the credit card, for many people, has come to symbolize a system of being able to purchase what you cannot afford. A credit card will allow people to live outside of their means, to overspend. When all you have to do is flash a plastic card and you are given what you want in exchange, it is difficult to remember the large bill that will be coming soon in the mail.
