Today, more than 84 million US households hold at least one credit card, with credit card spending levels reaching over $1 trillion dollars each year. Consumers can find a credit card to meet virtually any financial need, special interest, or credit background. But where did it all begin?

Early credit card use
The first recorded use of credit cards in the United States occurred in the early 1900s, when individual department stores, communication companies, hotels and other travel companies, oil companies, and various other businesses began issuing small metal cards to their preferred customers. These cards, sometimes called "metal money", offered customers an interest-free, deferred payment option. Unlike today's cards, customers could only use their "metal money" with the company or business that issued the card.

The popularity and use of this type of charge card increased until World War II when all use of credit and charge cards was prohibited. After the war ended, however, charge cards bounced back in use and popularity, becoming even more accessible to the general public.

When consumer trends indicated that customers with charge cards were spending more than other consumers, banks became very interested in the potential profit behind the credit card industry. The Franklin National Bank in New York issued the "Charge It" card in 1951, allowing customers to make charges with local retailers. Impressed by the success of the "Charge It" card, other local banks introduced similar services to their local customers.

Universal credit cards emerge
In 1950, Diner's Club introduced the first universal credit card. Designed especially to meet the travel and entertaining needs of business men, the Diner's Club card could be used at a variety of restaurants, retailers, and other businesses. American Express released their own major universal card in 1958.

Bank of America introduced the first "revolving-credit" card, called BankAmericard in California in the late 1950's. The "revolving-credit" plan gave customers the option to pay their credit card debt all at once, or pay a monthly minimum with interest over a longer period of time, marking an important milestone in the development of the credit card industry .

In the mid-60s Bank of America began licensing other banks across the nation to issue BankAmericards, allowing smaller banks to offer expanded services to their local customers. Master Charge followed suit, and by 1969 almost all independent bank charge cards were licensed through either BankAmericard or Master Charge. To facilitate international expansion, BankAmericard changed their name to Visa in 1976. Master Charge followed by changing their name to MasterCard.

Streamlining the process
Bank Card Associations, such as Interlink Association, Western States Bank Card Association, and National BankAmericard Inc. emerged in the 60s to manage the now enormous task of issuing and processing charge cards across the nation. This made it possible to better regulate, manage and streamline the credit card transaction process.

Electronic card authorizations were introduced in the 1970s, allowing retailers to get approval for transactions 24 hours a day. And by the late 1970s, magnetic strips on the back of cards, along with electronic dial up terminals shortened the transaction approval process to only 1-2 minutes. Now card authorizations can be almost instantaneous, allowing even greater convenience for both the retailer and the customer.

Credit cards today
Today, more than 84 million US households hold at least one credit card, with credit card spending levels reaching over $1 trillion dollars each year. Consumers can find a credit card to meet virtually any financial need, special interest, or credit background, and credit cards are now accepted by millions of retailers, whether you shop with traditional merchants, by phone, mail, fax or online. With so many cards available offering so much shopping convenience, it's not hard to tell why credit cards continue to grow in popularity.