History of credit cards (Plastic Cards)

The first plastic card wasn’t plastic at all. Cards started life on the other side of the Atlantic as ‘metal money’ in 1914 when the US Western Union started providing metal cards that gave free payment privileges to preferred customers.

The first proper plastic card was a charge card issued by American Express in 1958. It was 1963 before this made it over to Britain and was swiftly followed by the ‘Barclaycard’, the UK’s first credit card launched on 29 June 1966.

Since then, cards have gone from strength to strength with more people taking up the ‘flexible friend’ and new features, like cashback, being introduced. Concerns grew about rising fraud and card security during the 90s.

This led to the introduction of chip and PIN in 2003 – the biggest consumer change to
the way we pay since decimalisation.

The final switch over to chip and PIN happened on Valentine’s Day 2006.

Future developments

2006 saw new ‘smart card’ technology introduced into the world of card payments – opening up a whole new range of possibilities:

• Replacing cash –
cash is still king for payments under £5. However, the introduction of contactless cards could change all that – the future could see an increase in the number of card payments for small purchases such as newspapers and sandwiches as these cards are launched throughout the UK in the forthcoming year.

• Prepaid cards –
a whole range of new prepaid cards are coming onto the market which allow temporary workers to receive wages electronically or younger people to use these cards to make purchases online.

• Cards that do –
in the near future you could be carrying just one card in your wallet. It’s likely that card companies will have the technology to put your debit and credit cards or new loyalty or gift schemes onto a single card. Not only that, even you office access card, your phone card, sim card, etc. may be all integrated into one single card – who knows.

Previous Article: Understand your Credit Cards

Different cards or Plastic Cards

Plastic cards are the UK’s favourite way to pay.

Spending on plastic cards overtook cash in 2004 and has continued growing ever since. Plastic cards allow us to pay for goods and services virtually anywhere in the world, easily and conveniently, and provide a more secure alternative to cash and cheques.


Debit Cards

When you use your debit card the money you spend is taken directly from your current account. As long as you have enough money in your account you can use your debit card to buy things in person, over the phone, by mail order and over the internet. It also enables you to withdraw money direct from your account, and may have a cheque guarantee and cash machine function.

Credit Cards

A credit card allows you to pay for goods and services with credit up to a limit agreed with your card issuer. You have to pay back what you borrow - the costs, terms and conditions will vary from card to card and interest is normally charged.

Charity/Affinity Cards

Some credit cards are issued on behalf of charities and other organisations like football clubs and universities. For this type of card the card issuer usually makes a donation to the charity or organisation when the card is issued or each time that the card is used — at no additional cost to you.

Charge Cards

These are similar to credit cards. They allow you to pay for goods and services on interest-free credit but whatever you borrow must be paid in full at the end of a specifi ed period, usually every month or you may incur fees.

Cardholders may be charged an annual fee.

Store Cards

Store cards are a type of credit card.
They can be used in fewer places, often only in the individual shop or chain that issued it. Interest rates on these cards tend to be higher than on standard credit cards and credit limits tend to be lower. However, many shops provide special offers to their cardholders.

Previous Article: Checking your Credit Card Statement