The Beechmont Crest Guide to Economics
The History of the Credit Card
The credit card is a postwar invention. A banker named William Boyle came up with the concept of the credit card in 1951.
Boyle had worked for the Franklin National Bank in Long Island, New York. As a banker, his main customers were suburban consumers and businesses that served consumers, so he was perhaps uniquely positioned to happen upon the idea of the credit card.
Prior to the credit card, most retail businesses maintained charge accounts for individual consumers. While these allowed consumers to make purchases on credit, they were cumbersome for merchants. And it was easy for consumers to forget how much they owed a particular merchant.
Enter the credit card. The credit card allowed consumers to make purchases on credit from practically any merchant. Merchants, in turn, were relieved of the charge account burden.
Credit cards really took off in the United States during the 1960s. MasterCard and Visa became well known national cards during the 1970s.
With the growth of credit cards came the importance of having “good credit.” Today a consumer’s “credit score” is a major criterion that banks use when deciding whether or not to extend credit to a consumer in the form of a loan.