History Of The Credit card - Online Credit Cards

History of the online credit cards

You may have been using it forever, but have you ever wondered how the use of this convenient piece of plastic came about? Basically, online credit cards allow individuals to utilize the credit system where the user is allowed to charge purchases against online credit cards, with a predetermined amount of credit limit. As long as the credit card holder has not exceeded his or her credit limit, charges can continue to be made against the online credit cards.

Naturally, there is a previous agreement that the credit card holder is responsible for the payment of the charges incurred against the online credit cards. Unlike charge cards which require the full amount owed to be paid each month, online credit cards have a more flexible payment scheme. However, if you fail to pay the full amount or at least the minimum amount required by the credit card company on time, interest rates will be applied.

Time line History of the Online Credit Cards

Here's a quick look back at the important dates in the history of the online credit cards:

1730 - The history of the credit card can be traced back to as early as the first part of the 17th century, where Christopher Thornton sold furniture pieces which buyers can pay on a weekly basis, as opposed to purchasing and paying for the items in whole.

1920's - A credit scheme used by merchants to sell fuel to car owners in the United States was used. Hotels and oil companies began honoring the 'buy now, pay later' scheme in selling the products and services that they offer.

1938 - Companies in the United States started accepting credit cards issued by other establishments.

1950's - Two of the very first credit card companies, American Express and Diners Club, issued the initial form of the plastic charge cards which are similar in appearance to the credit cards which are being used today. From a number of 200 customers who could use the cards at more than 20 restaurants, the number grew to 20,000 owners of Diners Club cards. However, the charges made against these cards needed to be paid in full.

1959 - Credit card holders during this year were offered the option of not making out the full payment amount. Instead, they are offered greater financial flexibility in controlling their finances.

1960's - Visa and MasterCard began issuing 'open-loop' credit card systems to consumers.

1980's - In the latter part of this look back into the history of the credit card, additional credit card companies evolved which includes Discover and American Express. At this point, the magnetic strips at the back of credit cards are already being utilized to make real-time transactions possible.

Although there may be an entirely different generation of payment means in the future, the popularity of credit cards is not about to fade anytime soon.