Credit Cards


Boston University, USA

DOI: 10.1002/9781118989463.wbeccs082

Credit cards were invented and mass issued for the first time in the United States after World War II, although their emergence can be traced back to the early 1900s and the rise in consumer lending. This was when the first mass-produced consumer goods were made available to Americans, including automobiles, pianos, sewing machines, and, with the availability of electricity, electrical appliances. Sears was one of the pioneers of installment credit to buy household goods through its catalogue, but smaller stores were not far behind: they frequently kept an open book account for their most frequent and loyal customers. Early credit cards were issued by merchants such as department stores, gas stations, and hotel chains to their own customers, so the cards tied the consumer to a particular retailer or, at least, to a particular brand (Shell Oil cards could be used in Shell stations across the country, for example). Retailer-procured consumer credit was not the sole source of credit cards, however. In 1914 Western Union introduced a paper charge card to assist in money transfers. The card identified the customer and the account from which the charge was later deducted.

The term “credit card” was initially coined by Edward Bellamy, a writer and a socialist, in his 1881 futuristic novel Looking Backward: 2000–1887. In his vision of a utopian society, credit cards would entirely replace cash; they would ...

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