Articles Factory, March 21, 2007

By Sweepthish Jayan

The concept of credit came first in Assyria, Babylon and Egypt 3000 years ago. Plastic money first came into being in 1950 when Diners Club and American Express launched their charge cards in USA. In 1951, Diners Club issued the first credit card to 200 customers. With the magnetic strip used in credit cards coming in 1970, credit card became more popular.

Credit cards have gained pace over the last decade. Now, it has become easier to get a hod of credit cards. There is also a huge variety of choice for opting credit cards. More and more banks are encouraging people to opt for credit cards. With the arrival of globalisation and privatisation, the concept of credit cards is gaining popularity. Now, customers have no longer to carry huge amount in their wallets. Most of payments of the bill are done through credit cards. In India, people recognise the card as a status symbol.

In India, Citibank, Standard Chartered and HSBC are the main players. There are exclusive cards that offer their holders a huge array of benefits in exchange for a fee. But there are also cards that carry no subscription fee, give zero percent on balance transfers and sometimes on purchases to for a certain period and offer quite competitive rates after that.

Credit cards are becoming more and more popular for the people who frequently travel abroad. They simply carry a credit card rather than to carry traveller’s cheques or a host of currencies along with them. This can be used to pay almost anywhere in the world. Of course credit cards will charge a fee for all of this, but increasingly, as these fees become more competitive, customers are deciding that the fees are well worth the convenience and reliability that they offer while abroad. They are also very secure and if lost or stolen, can be cancelled quickly and easily.

Online shopping has been another reason for the growth in popularity of credit cards and one of the main advantages to those shoppers who buy more and more goods and services online.

All of these benefits results in growth in the popularity of credit cards, but also give rise to a serious problem of debt. The economy is in terrible straits mainly due to consumer debt and with the lure of credit within everyone’s easy reach the problem looks set to increase. Only a massive swing in consumer attitude could change this problem without the intervention of the government. Therefore, anyone considering taking out a new credit card should check the terms and conditions carefully and find out if they can afford it or not.

(The author is Assistant IT Officer, CUTS International, a leading research, advocacy and networking group and can be reached at

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