Credit cards are small pieces of plastic that can help individuals pay for purchases. Credit cards were starting to be used in the 1920s by several companies, and they were more widely accepted by businesses in the late 1930s. Banks first began issuing credit cards in 1946, and the Diner’s Club began distributing cards in 1950. American Express and Visa first started circulating cards in 1958.
Credit cards are currently made of plastic; however, they have previously been made of metal coins, paper, fiber and celluloid. All cards include a number recording the consumer’s identity that makes transactions quicker to process. Merchants accept most major credit cards, and they pay the company a fee for credit card processing. Businesses have merchant accounts that allow them to accept payments by credit cards.
Credit cards became extremely popular in the 1970s, so Congress prohibited the mass mailing of credit cards to individuals who had not asked for them. In 1996, The Supreme Court revoked restrictions on the amount of late penalty fees that a company could charge.
Statistics show that 80 percent of the population own at least one credit card. Many people who own credit cards have at least four memberships. About 10 percent of the people who own credit cards have at least 8 accounts. The average interest rate for a credit card is around 20 percent. There are a billion cards in circulation. Visa is the most commonly used card for credit card processing. MasterCard is the second most popular card, and American Express ranks third as the most commonly used card. The average consumer uses a credit card 120 times during a year, charging about 10,000 on their cards.
Unfortunately, many people call victim to fraud. Credit card companies lose around 60 percent of the money and merchant accounts lose 40 percent of the money when fraud is committed. Fraud was the result of losses totaling more than $3 billion annually, and both credit card companies and businesses are trying to take action to combat fraudulent activities.
Credit cards have been around for decades, and they are here to stay. The internet has made it even easier to make purchases or pay bills with credit cards, so the amount of credit card debt that people have is expected to rise. Therefore, individuals should expect to keep receiving credit card offers through the mail or email.