NEW YORK (AP) - Want to hunt polar bear in Alaska, entertain your mother-in-law at a Paris restaurant, rent a house-boat for a Mississippi cruise, hire a big-name orchestra for your daughter's wedding reception—and charge it?
All you need is a credit card.
These are some of the more bizarre ways you can use a credit card but their purchasing power covers the whole gamut of goods and services.
It's estimated that Americans are carrying 200 million credit cards and using them to spend around $50 billion a year.
As a result of the proliferation of credit cards, there has been widespread speculation about the possibilities of a checkless, cashless society in the future.
Some bankers envision nationwide system In which a single identification card would be used in place of all checks and almost all cash.
But American Express, a big name in the credit card industry, says, "The single-card system couldn't be further from reality today. The most striking feature of our present system of transferring money is the multiplicity of credit cards."
Credit cards as we know them today were pioneered in 1950 by Diners' Club, which was created with 200 members, an initial investment of $18,000 and a handful ot restaurants In the New York City area. Within a year it had grown to 10,000 members who could charge at more than 1,000 establishments.
Credit cards now fall into three categories:
—Travel and entertainment. Operators in this field are American Express, Diners' Club and Carte Blanche. These cards are held primarily by business and professional men.
—Private label. Oil companies, airlines, hotels, car rental companies and department stores offer these cards primarily to promote their services or products.
—Revolving credit cards. These cards, largely regional or local in nature, are issued mainly by banks and financial organizations and are meant primarily for use by housewives for shopping.
The credit card companies derive their revenue from discounts from establishments which accept the cards in lieu of cash and from membership fees. Some credit card practices have come in for criticism recently, mainly because of the mailing of unsolicited cards by banks and some others in the revolving credit field.
Read more:
Credit Card Rings (1964)
Online Shopping (1967)
Prelude to a Great Depression (The Chronicle Telegram, 1929)
Were credit cards - even revolving credit cards, as the article described them - not accepted everywhere at this time? For example, if you had an Amoco card, was it only good at Amoco?
ReplyDeleteI don't mean to sound ignorant, I'm just young (19) and barely remember when credit cards were charged using a paper form.
The cashless, debit card society wouldn't be so bad if they didn't charge me $1 a transaction with the damn thing.
ReplyDeleteYes, an "Amoco card" or "Macy's card", etc., was only good at that store. It wasn't a Visa with a Macy's image or affiliation; it was literally a Macy's card. A big wheeler-dealer would therefore have a portfolio wallet with 10, 12 or more cards for various stores and businesses.
ReplyDeleteIt is amazing to think of how times change; today it's hard to imagine *not* using a credit card for the big purchases described in the 1st paragraph of the excerpt -- yet at the same time I can remember the first time I used a credit card to buy groceries; it was 1989 and I was a starving (almost literally) post-grad living in Boston and between paychecks. It seemed quite a folly to use a credit card to buy groceries. Now it's rare for me to use cash to buy anything -- I just took a 7 day vacation in New England; I left home with $60 in cash in my wallet, and still had over $20 on my return.
That kind of credit card (single-store use) still exists, and is actually not uncommon in certain sectors. Oil companies all have their own Aamoco-only or Shell-only or whatever cards. They tend to have some special benefits associated with them and are popular with companies that own a vehicle fleet. Large department stores also still have them, such as Kohls, and the membership warehouse stores like Costco. You also see them for some computer makers (Dell has one) and jewelers. I suspect they're oriented primarily toward places where you make a single large purchase (You go try to buy a diamond ring, and you will probably be offered a credit card).
ReplyDeleteThese days, though, those cards *are* issued by Visa or Mastercard or whoever, just under a special arrangement with the store, because they use their financial network to manage the transactions, they're just private-label.
It was weird to use a credit card at a restaurant?
ReplyDeleteIt seems ridiculous to even speculate about a cashless society when so many of our transactions are "under the table." The Black market in the US is about 8% of GDP which is a huge number. Not only that but there are plenty of reasons to not have your every transaction, your every move, be tracked.
ReplyDeleteI remember a great Business Week article on this very topic from some time in the late 1960s. One illustration had street scene with a guy with a begging cup wired to an antenna. Wow, they anticipated WiFi!
ReplyDelete