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Introduction of Credit Cards 1950's
First Credit Card : The concept of paying for goods using a card started in 1950 and the main cards available in the United States in the early years were Diners Card and American Express, both required full payment at the end of the month so were only provided to the most financially respected consumers , in 1958 Bank of America created the BankAmericard which later became Visa and in 1966 Master card followed which allowed for payment of a fraction of the credit outstanding with interest charged on the outstanding balance.
Current Facts re: Credit Cards :
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USA 144 million credit cards held in 2003
In 1990, average amount in credit card debt was about $2,550 for those households that carried a balance.
In 2003, average amount in credit card debt was about $7,520 – an increase of nearly 200 percent!
UK In the UK 59 million people hold some 67 million credit cards, meaning the average person has more than one credit card.
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Changes to our lives through credit cards : Over the years credit card companies have targeted younger and younger consumers at University and straight after leaving school and many of these younger holders have trouble controlling the spending and are facing financial problems early in their lives, and the average consumer is taking more and more credit on. In 1999 — for the first time in about 50 years U.S. households started spending more each month than they took in, not only due to credit cards also due to mortgage debt, student loans and automobile loans.
Where will it end : Currently consumers do not appear to see the financial time bomb ticking away, but eventually we may well see some major changes in consumer habits , it could be caused by an increase in interest rates or a higher percentage of personal bankruptcies causing credit card companies and others to tighten lending criteria, but when it does come as it surly will we may see some changes in shops with deflation and not inflation occurring to keep companies and the economy afloat. Around the world many credit card companies are slowly starting to tighten lending with higher percentage monthly payments and decreasing the amount for lines of credit , also we are seeing a slowdown in the housing market and in the US an increase in the number of home foreclosures which could well be a sign that the amount of credit available is decreasing.
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