History of Credit

Credit has been around for a while. We don't know the exact date but historians have evidence of Roman banks making interest-bearing loans as early as 2000 BC.

Fast-forward to the rise of the British middle class who worked with bankers to create overdraft protection. This was one of the first forms of consumer credit because overdraft protection is really a type of loan that kicks in automatically if an account doesn't have enough money in it to cover the checks written against it.

Here in the United States, The Ford Motor Company played a large part in creating the consumer credit business. Even though the Model T was the first mass market car, not all Americans had that amount of cash saved up. Even if they did, many were reluctant to put it all into a motor car. So Small Loan Companies, also called Finance Companies, began making the first car loans.

The next significant moment in the development of consumer credit came at the end of World War II. American commerce and industry saw explosive growth and expansion which drove up the pace of life. Retailers and other goods and services providers began finance programs that let people buy their wares "over time".

Charge cards, one of the precursors to credit cards, came along during the 1950's and were first issued by the oil companies for drivers who wanted a convenient, cashless way to pay for gas. Unlike credit cards, charge cards don't give you the option of paying for purchases over time. The first true credit cards were issued by VISA and MasterCard and weren't common until the early 1970's.