Despite Fraud, Credit Card Use NOT Slowing Down

Greenbacks may have been around for hundreds of years in this country but it’s plastic currency that handles most purchases these days.

More than a billion credit cards are reportedly now in circulation in the United States. Credit card offers arrive in the mail on a daily basis for many Americans.

Sixty-seven percent of all clothing sales, 64 percent of gas transactions and 62 percent of travel expenses are put on a credit card these days, according to creditcards.com.

There are a lot of significant dates to review in the evolution of the U.S. credit card such as 1946, when Brooklyn banker John Biggins introduced the “Charg-It” bank card, or 1950, when Diners Club got started. There was also 1958 when the Bank of America sent out the first mass mailing (in Fresno, Calif.) of a credit card called BankAmericard.

But 1959 might have been the most important year of all. That’s when MasterCard introduced the idea of a revolving balance, allowing customers to hold off paying their bills — and accumulate finance charges.

Today, credit card companies make up an industry all of their own. The names are well-known: American Express, Capital One, Discover, MasterCard and Visa.

Also well-known are the problems associated with credit card usage — and not just about making payments on time.

Recent massive data breaches at stores like Target and Neiman Marcus have made headlines, possibly compromising millions of debit and credit cards.

But Americans remain attached to their plastic. Visa, the world’s largest processor of debit and credit card payments, announced that first-quarter earnings were up 9 percent in January.

That’s despite a lackluster holiday shopping season with U.S. retail sales rising only 0.2 percent in December, according to the Commerce Department.

Visa reported processing 16 billion transactions during the last three months of 2013, up 13 percent from a year earlier.

Consumers need to do some research on the different types of credit cards available, said Mary Conrady, vice president of consumer lending at the CEFCU credit union.

“You need to see what you can afford. Credit cards are a nice tool for short-term purchases but not to live on,” she said.

Be aware that even zero-interest credit cards come with a condition, said Conrady. “If the customer doesn’t pay their bill in time, the credit card company can add all that interest,” she said.

It’s wise to check the credit card statement every month — and not just for a big charge that might jump out at you, added Conrady. If you see a $9.84 charge on your credit card statement, for example, give it a hard look, she said.



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