The credit card celebrates its centenary

2014 marked the anniversary of the first ever credit card. It has come a long way since its inception as a metal voucher…

So, 2014 was the year that marked the 100th anniversary of the credit card. The first one was created by Western Union in 1914 and was made out of metal. The privilege of deferred payments was bestowed upon holders of these metal cards and thus purchases became known as metal money.

However, one of the first, if not the first credit concepts was introduced here in the UK by Provident Clothing Group, founded in Bradford, West Yorkshire. Vouchers were issued to members of the scheme who could shop at certain retailers and have a rep call round at a later date to collect payment. They could repay in affordable weekly instalments. Over a century later of course, we have Provident Financial, encompassing Satsuma Loans, Tandem Loans, Moneybarn and UK credit card provider Vanquis Bank.

The first plastic card was issued by Diners Club in 1962. On June 29 1966, Barclays issued the first UK credit card, and 48 years later, Barclays is injecting new life into cheques, another form of delayed payment, by introducing cheque scanning. Barclays is rolling this out to a million Premier Account holders and will pilot it with corporate customers, who deposit about 46m cheques each year, it says. Next year, it will be introduced to charities, half of whose donations are received in cheques.

Credit cards have evolved to become a cheap form of lending, especially as money can now be transferred to a current account instead of to another credit card balance, and Barclays is at the forefront of this market, being one of the top three credit issuers competing for the best rates. It recently extended the transfer period to 34 months so if you consider the transfer fee of 2.99% being equivalent to a standard loan APR, you’ve got yourself a pretty good deal.

Then we have Twitter turning credit cards into coupons. Not sure how far that one will go, seems rather complicated, and the coupons, by all accounts, are applied as a refund against a full price purchase, rather than the customer being able to receive discount on purchase. The only time this method has been of appeal was during #farefreeFriday, courtesy of MasterCard. I still wonder whether I was the only person in London who actually took up this offer, not for lack of interested punters but for lack of contactless MasterCards. 

Cards are being used more and more in Britain. According to BBA figures: 

•             The volume of card spending in October was 8% higher than a year before

•             Card borrowing is growing by 5.8% annually.

•             Nearly 42% of all card borrowing incurs no interest charges. 

Commenting on the statistics Richard Woolhouse, Chief Economist at the BBA, said:

“The number of credit cards carried by British customers has been rising by 1,000 a day.

“Purchases and borrowing on plastic is also growing, suggesting that consumers are feeling optimistic about their job prospects and happy to spend.

“It looks like retailers can expect a rather Merry Christmas and because 42% of credit card borrowing does not incur interest the January festive hangover may require a little less Alka-Seltzer than in previous years.”