Credit Card

The idea of buying something on credit is pretty much something we take for granted. However, it wasn’t always that way. While credit has been around for as long as there has been something that somebody wants from someone else. The idea of putting something on credit with a credit card has only been around for about 50 years.

Way back before the First World War, Western Union began offering some of its customers a deferred payment option with a small interest payment. Therefore they could buy a fairly mundane consumer product and pay for it later.

This wasn’t common practice though, until the twenties, when people thought that the economy would never dry up and they’d always be making more money the day after today.

As we all know these people were completely wrong and the economy went belly up. After the crash there was a real hesitation to lend people money or to borrow money. Too many people had been left in the dust.

It wasn’t until the 1950’s that people became confident again and credit cards took off. The Diner’s Club, who offer credit cards that could be used at various locations, first developed the idea of the credit card.

The idea caught on and soon the banks got in on the act (naturally). Banks realized that they could extend the payment time period indefinitely and let interest grow on itself. Therefore, the longer it took people to pay off their credit cards the more money they would make.

Much money they made! Today American credit card debt runs in excess of 550 Billion dollars. This is not chump change. In many ways America would be crippled without credit cards.

So, don’t be crippled by your own credit card. Make sure that you make your payments on time, and never take cash advances unless you really need to. You will be charged interest from the money you hit the OK key.

Also, be sure to keep you credit card information safe. All it takes is for you to misplace your card for a half an hour and someone else can deplete your entire credit holding. While most credit card companies will forgive this. It will affect your credit report and it will be harder to get a loan or borrow money in the future.