Little Known Facts about Credit Cards

The concept of extending credit has been used for thousands of years, but the first "credit card" didn't appear until the 1950s. The usage of credit cards has significantly grown since its inception. Below are other interesting credit card facts that you may not have known about.

What organization issued the first card:

The Diners Club issued the first charge card that consumers could use at different business locations and which allowed them to defer payment. Financial organizations soon caught on to the lucrative opportunity of billing for charges and requiring payments with interest, and the idea quickly spread.

What do some of the numbers on a credit card mean?

The first digit represents the system: whether the card is a travel or entertainment card (Diners Club, for example), Visa, MasterCard, or Discover. The numbers that follow represent a bank number, account number, and a "check" digit, but the order may vary per system.

What is a smart card?

A smart card is a payment card with an embedded microchip. The chip enables the card to hold more information than the common magnetic stripe card. The increased data capacity enables each individual smart card to perform many functions, such as holding bank and credit account information, providing building or room access, and even keeping track of reward points or miles.

How much is an individual liable for if their credit card is stolen?

The Fair Credit Billing Act limits cardholder liability in the event of fraud, and the cardholder is not liable for any charges incurred after the card is reported stolen. Charges that occur before the card is reported missing are waived after a $50 fee is paid to the issuer, and as long as the theft is reported within 24-48 hours.