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Tuesday, May 14, 2019

A Brief History of Credit Cards

Both nationally and globally, we're all super-dependent on credit cards to purchase pretty much everything

We're not talking credit card debt - that's another matter

We are more and more becoming a cashless society which of course the system loves because every transaction can be recorded for posterity long after the bill is paid so anyone who has access can know your behaviors and patterns

So how did we get from a society that pretty much used cash or personal checks to buy goods and services to one that is so heavily credit and debit card dependent

Here's a very brief history
Prior to the 1980s, if you had a credit card, you were in the minority and you had either American Express, Diner's Club, Master Charge (which became MasterCard) or the BankAmericard (which ultimately became Visa)

To possess any/all these credit cards, you had to pay annual fees and in the case of AMEX, you were required to pay the full amount due when your bill came - no minimum or partial payments allowed

But by and large in 1980 America, most did not have a credit card.

Why was this?  What started the onslaught?
Back then, each individual state controlled the maximum interest rate a card could charge its customer so someone in say Georgia could only be charged 16% APR financing while someone in Missouri would lets' say cap it at 12%

The credit card companies hated this so they would target attracting customers in states that allowed them to charge the highest interest rates

Ultimately they decided to get together and lobby Congress to get the law changed where the interest rate in the state in which each corporation was located was to be the set amount to charge to all
So when that was passed, it became that whatever South Dakota or Delaware's state government allowed (all credit card companies are located in one of the two states as its base of operations) that is what everyone in the US would be charged for unpaid balances

Now they could start to mass advertise and draw people in with low annual fees followed by no fees and points and perks and this and that..

But what really saw the spike in credit card use from convenient to dependent was the birth of online shopping on the internet

So as online use spiked especially with the dependence to portable devices and phones to do everything, it made cash very impractical and unnecessary to possess
The last barrier to eliminating the desire in people to want to use cash to buy things, was that in the past, it used to be physical stores would not accept credit cards unless one made a minimum purchase because of the transaction fees a business was charged

Once places like fast food restaurants and convenience stores allowed credit card transactions for minimal amounts, some even allowing purchases under a dollar, then cash just became a pain to carry

So ultimately we will all be a cashless society down the road and lose even more of our privacy and autonomy but people like their convenience and like a lobster in a pot, the whole intentional manipulative shift was so slow and calculating, people are oblivious

And this is just another step in the ultimate goal of those who control things - a global world with a global currency and global tax