John Biggins: Who Invented The Credit Card?

Who Invented The Credit Card? Credit Cadabra

The term “credit” is defined as “trustworthiness.” Any time you borrow anything with the aim to repay it is termed credit — someone is placing their trust in you to repay them.

The concept of credit has been around for a long time, but it wasn’t until the late 1940s that modern-day rewards credit cards were born. Do you know what happened before?

Who invented credit cards?

It’s difficult to imagine a system of exchanging goods like spices or cattle, a world that exists not far from the past.

Ironically, for those of us who have been involved in the miles and points hobby for years, even cash appears ancient. I almost never carry cash on my person (which is quite irresponsible), as I would never consider using it to pay a bill. The most rewarding method of purchasing does not entail ANY type of physical transaction. Simply swipe a travel credit card, grab what you want, and invest the money in your forthcoming complimentary holiday.

In the nineteenth century, a few devices were created to symbolize credit. The Diners Club card, introduced in 1951, is widely believed to be the first widely used credit card. However, significantly predating that card, the first incarnation of the modern-day credit card, a product you’ve never heard of, was introduced in the mid-1940s by a man named John Biggins.

Why was the John Biggins credit card invented?

John Biggins was a banker for Flatbush National Bank in Brooklyn. In 1946, he showed his innovation, a bank card dubbed “Charg-It,” to residents of his neighborhood. Biggins’ objective was to increase his bank’s customer loyalty. The “Charge-It” card was available to only individuals with accounts at Flatbush National Bank. Due to the fact that this was an experimental program, they could only use the bank card at participating local merchants.

When a customer used their card to make a purchase, the merchant would hand over the things to them without asking for payment right away. After that, the merchant would go to the bank and deposit the sales slips. The bank would pay the merchant and then charge the cardholder.

Around 1958, major banks entered the fray when American Express and Visa became the first to create their own credit cards. Discover, JCB, and MasterCard came in second and third, respectively. Airlines didn’t start creating frequent flyer programs and working with banks until the 1980s, giving consumers added incentives to use credit cards decades later.

How did credit cards gain popularity?

The first widespread credit cards were aimed at traveling salesmen. Customers quickly realized the cards’ time-saving aspect, which skyrocketed their popularity, after they were initially marketed as convenient for use on the road. In fact, before it was illegal, credit card companies would mail pre-activated credit cards to people who had never even applied for one in an attempt to gain their business! Some credit cards don’t require a credit check, which adds more versatility to credit cards.

How has the credit card industry evolved over the years?

In 1960, IBM added a magnetic stripe to the back of the credit card, holding sensitive data such as your name, card expiration date, and account number.

Since then, numerous attempts (many of which failed) have been conducted to make credit cards more enjoyable, flashy, convenient, and distinguished. 

Additional successful examples include the following:

  • Mini credit cards designed for keychain use
  • The ability to include a personal photograph on the front of the card
  • RFID-enabled credit cards that accept contactless payments
  • Capabilities for chip + pin
  • Payments via mobile apps such as Samsung Pay and Apple Pay require a digital card number.

Card companies are always looking for ways to improve security, and for the time being, the addition of EMV computer chips is the best solution.

In conclusion

Credit is a concept that has been around for a long time. However, in 1946, a Brooklyn banker named John Biggins invented the modern-day credit card model. We couldn’t earn travel rewards for using their credit cards until the 1980s. You and I were unquestionably born in the correct generation! If you need any assistance with your credit report please contact us!

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Francesca Castillo