Here are some interesting credit card facts that may transform the way you look at your wallet.
Receiving your credit card statement each month may be the polar opposite of enjoyable, but credit cards themselves are a fascinating subject.
The little plastic cards on which we all rely have a long and illustrious history, and there is a lot that most people don’t know about their primary payment method.
Valid credit card numbers follow a formula known as the Luhn algorithm.
With this algorithm, starting from the right, you double every second digit. (For instance, 1111 would become 2121).
You then add together all of the resulting digits. If the number you come up with is divisible by 10, then the credit card number is valid. If it’s not divisible by 10, it’s an invalid card number.
You’ve probably noticed that all of your cards from the same issuer begin with the same number. That isn’t by chance.
A credit card’s initial digit shows the industry that issued the card:
- 1 and 2 indicate an airline card.
- 3 and 4 indicate the travel and entertainment business.
- 4 and 5 indicate financial institutions.
- 6 indicates merchandising and banking.
- 7 indicates gas cards.
- 8 indicates telecommunications.
- 9 indicates national standards body assignments.
Expiration has two functions.
First, a physical credit card is only good for three to four years of swiping and dipping. An expiration date gives your issuer a deadline for sending you a new card before the old one comes apart.
Second, the expiration date provides some identity theft protection for cardholders because it is still another piece of information that you would only know if you had the card in your possession.
Most credit card providers will give you a replacement card before your current one expires. If they don’t, and you try to use a card that has passed its expiration date, it will be refused.
However, your account should still be valid; all you need to do is request a replacement card from your card issuer.
Farmers relied on credit granted by local general stores long before credit cards were widely accepted as payment.
They would need to utilize credit at their local store for at least part of the year in the 19th and early 20th centuries because their revenue was seasonal. In places with a high concentration of farmers, businesses began offering credit cards (originally made of cardboard) to assist in determining which customers were affiliated with which accounts.
In 1946, John Briggs invented the first bank-issued credit card. Briggs was a banker with New York’s Flatbush National Bank when he invented the “Charge-It” card, which was legally a charge card because the debt had to be paid in full each month.
However, Charge-It was only available to Briggs’ bank customers, and the card could only be used for local purchases.
Frank McNamara, president of Hamilton Credit Corporation, invented the Diners Club card in 1950, making it the first credit card that could be used in more than one store. After a business meal at a well-known New York restaurant, McNamara had the idea for such a card.
He’d changed his suit before the dinner but had left his wallet in his old jacket. After that humiliating episode, McNamara realized it would be good to have a non-cash method of paying for meals.
The Diners Club card was created. The card was provided to fewer than 200 people and was only accepted at 27 eateries in New York when it was originally released. Within a year, though, more than 20,000 people were using it.
Until the Equal Credit Opportunity Act of 1974, women couldn’t receive a credit card unless they had a husband as a co-signer.
This meant that credit cards were rejected by single women and married women who wanted to create credit apart from their spouses.
The 1974 law prohibited creditors from discriminating against applicants based on their race, color, religion, national origin, gender, or marital status.
There were over 1.635 billion credit cards in circulation worldwide in 2013.
If all of those cards were set to end to end, they would stretch for 86,981 miles or three and a half times around the world.
In March 2009, the American Bankers Association claimed that approximately 10,000 credit card transactions occur every second around the world.