The number of credit card applications has never been higher than it is today and this is a testament to the amazing benefits and rewards program modern credit cards offer. But unknown to most, credit cards had to face a long and arduous struggle to become the champions of financial spending they are today.
Here are some truly interesting facts that applicants can ponder on the next time they apply for a credit card:
Fact #1: From Paper to Plastic
While it is almost impossible to imagine that a credit card – one of the most secure types of modern financial tools could be made from paper, this is exactly how the world’s first credit cards were issued. Much before the time of online credit card applications and chip & pin cards, credit cards were distributed in a paper-based format and carried a credit limit of as much as US $300.
Fact #2: Dine & Dash
The first credit card that allowed customers to make purchases at multiple locations was created out of necessity and a fortunate accident that left Frank McNamara unable to pay his restaurant bill. The story takes place in 1950, when the head of the Hamilton Credit Corporation, Frank McNamara forgot his wallet and thought of a better way to pay for his meal – via a credit card. Soon thereafter, Frank McNamara introduced the Diner’s Club card, which could be used in multiple restaurants and hotels in New York. Within the first year itself, thousands of people rushed to apply for a credit card.
Fact #3: MasterCard does not issue credit cards…
And neither does Visa. While most credit card applications bear the unmistakable MasterCard or Visa logos, customers should not confuse these credit card payment giants for credit card issuers. MasterCard and Visa are both types of credit card payment networks. They do not issue credit cards, charge interest or manage card repayments. Banks and other credit card issuers usually partner up with one or the other to provide credit card benefits and secure payment features. When it comes to applying for a credit card, MasterCard and Visa provide an almost identical level of global acceptance and should not be relied too heavily upon to make a decision.
Fact #4: The original ‘gram – the hologram
Over 35 years ago, MasterCard took the first steps towards credit card security by issuing the first-ever credit card with a security hologram. This was done to combat counterfeit credit card transactions. The hologram remained a staple of credit card design till the late 1990s. However, credit card applicants should not be dissuaded from applying for a credit card without a hologram. Modern credit cards have implemented far more effective security protocols such as chip & pin technology. Chip & pin enabled cards contain a unique microchip, which is far harder to counterfeit.
Fact #5: Size matters
It is no coincidence that nearly every credit card has the exact same dimensions worldwide. Credit cards follow the ISO ID-1 standard, which clearly specifies the dimensions of a credit card to be 85.60mm by 53.98mm. In certain nations other cards such as national ID cards, public transport cards and even driving licenses adhere to the same standard. This was done to provide seamless connectivity for credit cards in ATMs and Point-of-Sale machines across the globe. Today, all major card issuers reward credit card applications with cards of the same size.
Fact #6: The heaviest heavy-duty card
After a brief infatuation with paper-based credit cards, credit card issuers finally made the jump to plastic based cards. American Express (or AmEx) was the first credit card issuer to issue a plastic credit card. Yet, this isn’t what AmEx is remembered for. AmEx later released their exclusive AmEx Centurion card, the first all-metal credit card. The card was composed of titanium and was the first in a long line of metal credit cards that are offered by numerous credit card issuers till date. What further boosted the popularity of this card was that customers could not apply for the credit card without an invitation.
Fact #7: First impressions
One of the most obscure facts about modern cards lies in the actual meaning of the seemingly random digits printed on a credit card. Some of these numbers actually denote specific details about the card. For example, the first digit on a credit card reveals the type of industry where the credit card application was submitted:
- Credit cards beginning with the digit 1 or 2 are issued by airlines.
- Credit cards beginning with the digit 3 are issued by travel and entertainment industries.
- Credit cards beginning with the digit 4 or 5 are issued by financial organizations.
- Credit cards beginning with the digit 6 are issued by the merchandising and banking industries.
- Credit cards beginning with the digit 7 are issued by petroleum and gas industries.
- Credit cards beginning with the digit 8 are issued by telecom industries.
- Credit cards beginning with the digit 9 are reserved for national use.
Fact #8: Credit cards live forever…
But the magnetic strip on the back of a credit card cannot. The magnetic strip on a credit card usually erodes over time and typically has a life span of 3 years from the date of issue. In fact, even the expiry date on a credit card is created with the magnetic strip kept in mind. Once a credit card application is approved, the expiry date on the credit card is set for 3-4 years from the issue date. Cardholders can continue to use the card even after it has passed its expiry date. The date mentioned is mostly used for verification purposes only.
Fact #9: Terms & Conditions apply
No matter where one applies for a credit card, there is always a disclaimer stating ‘Terms and Conditions apply’. In 2008, the Russian citizen Dmitry Agarko turned the tables on his bank by modifying the terms and conditions on his credit card application. The bank signed off on the document and effectively allowed Dmitry to use the card without paying any interest, fees or charges. Both parties later finally settled out of the court in 2013.
To Sum Up
A credit card offers enormous financial power and should be used responsibly. Be sure to carefully read the associated terms and conditions before applying for a credit card.