Want to learn some crazy facts about the history of credit cards, how they work, and more? Check out these 15 weird facts about credit cards.
Are the days of paying with cash coming to an end?
Credit cards are everywhere and are the preferred way of payment for much of the population.
Of course, the internet has certainly facilitated this – as using credit or debit cards is often the only way to pay.
Since credit cards are so commonplace, you probably haven’t given much thought to their history. So we’ve compiled this amusing, yet practical, list of facts about credit cards.
But one thing is for certain when it comes to credit cards:
Knowledge Is Power
Of all the facts about credit cards, this is the most important. Before signing up for any credit card, you need to KNOW all the terms and conditions.
Once you’ve got a grasp on that, having a credit card can be a lot of fun. As long as it’s used responsibly.
1. The First Credit Card
The first credit card was from Diners Club in 1949. It was made out of cardboard – like one of those loyalty punch cards at your favorite local coffeehouse.
It all started when Frank McNamara, co-founder of Diners Club, was dining with clients and realized he forgot his wallet. Much to his embarrassment, his wife had to pay the tab.
So McNamara conjured up the idea of a multi-purpose charge card that could be used whenever someone forgot their wallet. It also ensured that he wouldn’t suffer such humiliation in the future.
2. Chips Versus Strips
Ever wondered why credit cards with chips take longer to process?
Even though technology usually makes thing happen more quickly, this isn’t the case with the chips. But it’s all for security purposes.
The chip technology enables the card to generate a different encrypted card verification code for each transaction. Meanwhile, cards with just the magnetic stripe use the same code every time- creating prime conditions for counterfeiting.
3. Fluctuating Interest Rates
When you’re looking for the perfect credit card, you might only be looking at the interest rate. But be sure to read the card’s terms and conditions carefully. Because in many cases, that great rate is gone after the first 12-18 months.
And it’s totally legal because the banks that issue the cards aren’t bound by state laws that limit interest rates. So after that trial period, they can increase interest rates as much as they want, whenever they want.
You’ll definitely want to be extra careful about picking the best card if you don’t have the greatest credit. You could be especially targeted for higher interest rates. So do the research and learn more about picking the perfect card before you settle on one.
4. Hacker Gets Hacked
Back in 1997, a 19-year-old hacker hacked was able to hack over 6,500 credit cards. That might not seem like much these days. But back then, it was a pretty remarkable feat.
Unfortunately, the hacker got a little too proud. So another hacker, irritated by his sheer arrogance, tracked his location and gave it to the FBI.
5. Straight-to-a-Rep Phone Numbers
Have you ever had to call your credit card company? Well, try not to think about all the time you’ve spent being transferred from one department to the next, to the next, to the wrong one, only to get disconnected.
Because now you’ll be irritated to find out that credit card companies have unpublished backdoor numbers that allow you to speak directly to a fellow human being who can help you with raising your limit, lowering your APR and even approving your application.
The big mystery is, who has these numbers?
6. You Can Refuse Your New Rate
Up in #3 of these facts about credit cards, we talked about how credit card issuers can just raise your rates. Here’s your comeback to that – just say no.
If your rate gets hiked, tell them to forget it and that you’ll try another card. In an attempt to keep your business, they may offer you your old rate. If so, get it in writing.
Because otherwise, they’ll probably try to boost your minimum monthly payment, lower your credit line, or even close your card.
It should be noted though that if the company does close your card, you have five years or more to pay off what you owe, and at the old rate.
7. How Does Your Credit Card Company See You?
You’d think your credit card company would smile upon you for paying off your balance on time each month. But think again.
If you’re one of those, they refer to you as a “deadbeat.”
8. Why Leonard Cohen Toured Late into His Life
Leonard Cohen had a sneaky manager.
Over time, she managed to sell the rights to his music and net herself $5 million to pay off her credit cards. And maybe update her home decor?
In the end, Cohen was left with $150,000.
When he learned of this crime, he didn’t attempt to retrieve the money. He simply hoped she would learn from her mistake and become a better person.
9. You’re (Somewhat) Protected
If you’ve ever bought something online, found an unauthorized payment on your bill, or ordered something in a store only to receive the wrong thing, you’ve probably discovered that your credit card protects you. This is one of the best facts about credit cards.
You’ve probably heard that you can also seek a refund if you are unsatisfied with a purchase.
And that’s true… to a degree. First, you have to fix the matter with the company that sold
you the item.
Then the item must be worth at least $50 and purchased within a 100-mile radius of where you live. So in this case, the protection isn’t so inclusive.
10. Women’s Rights
Did you know that once upon a time, banks could refuse to issue a credit card to a woman unless she was married and her husband co-signed for the card? And that a divorced woman who couldn’t keep her marriage under control was considered too much of risk?
Here’s the worst part. Did you know that this was happening up until 1974!?
11. The Birth of Visa
Back in 1958, Bank of America mailed 60,000 Fresno residents a small plastic card with a $500 credit limit. It was an experiment and they assumed nobody would dare use it. They were wrong.
The experiment was hugely successful and the program later became known as Visa.
12. Fixed Is Still Breakable
If your card has a fixed rate, you might think you’re immune to changing rates.
Again, be sure to read the terms and conditions. Because your card issuer is not only allowed to change your interest rate but can also change the way it’s calculated.
And before you know it, your fixed rate card could become a variable-rate card. If your interest rate increases due to the change though, the credit card company is required to give you 45 days notice.
13. The Value of a Dollar
What’s a great way to earn 4 million free airline miles without breaking any laws? One man used his credit card to purchase free-delivery $1 coins from the U.S. Mint.
You can really get the experience of traveling with that kind of money.
14. Our Brains Like Credit Cards
According to a study, the brain’s pain receptors are activated when we see high prices. It actually hurts.
Using a credit card rather than cash, however, seems to greatly reduce the pain of paying.
Do you really understand your credit card balance?
Some credit cards claim to have no spending limit but may limit the amount of money you can carry forward from one month to the next. So if you charged $750 on one of those no-limit credit cards, but are only allowed to carry $500 over from month to month, then you’re going to owe $250 up front. Ouch.
So once again, read those terms and conditions.
Get All the Facts about Credit Cards
Having a credit card is great. If done right, they can open you up to a world of choices and freedom.
But if you don’t know the facts about credit cards you’re looking into, you could end up feeling imprisoned and in debt.
So stay informed. And keep checking back with us for more great tips on money, travel, business, auto, love, education and health/fitness.