The History of Credit Card: From the Beginning to Nowadays

Nicita and Pagano mentioned in their book that the barter system is a methodology of exchange at the beginning of time for transaction payment. It's the system has been used for hundreds of years before cash currency was fabricated as people used it to changed merchandise and repair that they need among one another as they return to other goods and services which they have. Soddy expressed in his book that metals objects were introduced as a medium of payment when the barter system as a lot of systematic ways to solve the weakness of the barter system. The metal was introduced because it had been without delay out there, easy to get, and will be recycled and use. As a result, each country began to mint its coin series with specific values to facilities trade systems among one another. because the coin had minted designated value, it became easier for all the customers to trade and pay based on the value outlined by the provider. Foster has mentioned in his book that cash has been present in different ways with the introduction of paper currency, non-precious coinage, and artefact money until it's replaced by paper currency nowadays. On the other hand, Britannica website mentioned that the emergence of the credit card will be referred back to the early 1900s because the United States’ department stores and its oil corporations took credit by issuing their proprietary cards. The primary credit card was issued within the year 1914 where America General petroleum Company began issuing to their customers for purchases made at company outlets. Evans and Schmalensee additionally mentioned that the concept of credit cards is redesigned and adopted by American Express Company within the year 1958 into financial merchandise that primarily uses for travel and amusement and charges its cardholders an annual fee and bills them monthly.

According to the Britannica website, Bank of America had started with the primary national plan named Bank Americard in the year 1958 and it had been renamed to VISA later. In the early 19th century, credit cards are still new money merchandise to the public wherever people don't have any knowledge regarding its function and benefits. Therefore, credit card issuers began to promote the advantages and prices of their credit cards. In the late 20th century, credit cards became a preferred payment methodology used by the public nowadays. Fell aforesaid that credit card is mostly issued by a financial organization and its core advantages are to provide a soft loan with a minimal interest charged to their several cardholders without collateral to be pledged. Today, credit cards are among the popular short-term debts financings among the public.

Kleiterp additionally opinion that promotional activity carried out by credit card issuers can influence the public to possess credit cards. Young and working adults are the most target of the majority of monetary establishments and firms. Darkin reported that nowadays credit card companies are promoting to the market to use a credit card by giving incentives such as free annual charge and supply supplementary cards. Moreover, Alam additionally claims that Malaysia’s residents have become a lot of brand-conscious and are seeking products that match their lifestyle. The most recent study was done by Dewri, Islam and Saha showed that the discount offers or alternative card facilities offered by credit card issuers can become encouragement to the cardholders to use their credit cards frequently.

Besides, low payment requirements additionally one of the factors that result in the public use a credit card. In keeping with Tamara and Javier, there's always intense competition among the credit card business. Thus, the business began to compete for the market share by reducing the payment requirements to attract customers. By lowering the payment requirements, it will attract the public despite age groups which imply the promotion strategy is additionally focusing on young or college students because it is more cost-effective to them.

Furthermore, the credit card is obtaining a lot of users to register because of its easy access to credit. It becomes catalyze to promote because it makes transactions less complicated and able to get the immediate need for cash. Mohamed found that credit card is extremely simple and convenient transaction methodology as consumers able to purchase anytime without concern their money flowing out from their pockets or a diminution in their bank balances.

Last but not least, the public’s attitude towards credit also can influence their decision to register a credit card. In keeping with the research of Darkin in the year 2000, pre-set credit line and technology developments can influence client preference in the widespread use of credit cards. Meanwhile, Chien and Devaney additionally provide their opinion that young consumers tend to own positive attitudes towards credit card use than the elder consumers because of younger consumers have the assumption where they will earn the money shortly and pay off the credit card debt that leads them willing to adjourn their payment. Roberts and Jones also mentioned that the credit card holder chooses a credit card to register based on its offered value and benefits. 

07 July 2022
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