History of Credit Card: How old is the credit card, when did it start in India?

MoneySoney Desk: Plastic money i.e. credit card has become very popular today. It has become an important part of the lives of millions of people. These include especially working youth, who pay everything from shopping to important bills using credit cards.

You too might be using credit cards in your everyday life. But, do you know when the credit card came into vogue, how it started, when it came to India and how many people in India have a credit card? Let’s know the answer to all these questions.

When did the concept of credit card come?

The meaning of credit card is very simple – spend first, pay later. By the way, this tradition is centuries old. Ever since sociality developed in humans, they have been doing such transactions. Such as taking ration on credit from the shop and then paying for it later.

The formal beginning of the credit card is considered to be till the middle of the 20th century. But, its foundation was laid in the early 1900s. In countries like America, departmental stores and oil companies launched their own credit cards. But, these were not like today’s traditional credit cards. You could use them only at certain stores.

The special thing was that their popularity grew rapidly. There were many rich people who avoided carrying cash. They started using these cards in stores and restaurants.

How did the modern credit card come into vogue?

It was the year 1950. Frank McNamara, the founder of America’s prestigious Diners Club International, reached a restaurant in New York to eat. After eating to his heart’s content, he put his hand in his pocket and found out that he had forgotten his wallet at home.

This is where the idea came to his mind that there should be a card that could be used not only in departmental stores but also at other places for shopping and paying bills.

With this intention, the world’s first official credit card – Diners Club Card came into vogue. It was launched in 1951. Initially, it mainly focused on travel and entertainment related expenses. But, it was so successful that it paved the way for the credit card revolution.

When did the credit card start in India?

After making a mark in Western countries, the credit card came to India in the 1980s. However, in India too, the system of spending first and paying it later was prevalent informally for centuries. But, it got an even faster boost with the credit card.

The State Bank of India (SBI) introduced its credit card in 1988. This started a new era in the financial history of the country. From here other banks and financial institutions also adopted the credit card model. This revolutionized the way the country pays and shops.

How many people have credit cards in India?

According to the data of the Reserve Bank (RBI), India had more than 9 crore active credit cards by the end of the year 2023. In 2022 this number was less than 8 crore i.e. during this year the number of credit card holders jumped by 17 percent. On the other hand, as of January 2020, only 56 million people had credit cards. This means that the number of credit cards has increased by 63 percent in about three years.

Talking about a developed country like America, about 82 percent of the people there have at least one credit card. There are many people who have multiple cards. You can guess this from the fact that Americans have an average of 3.84 credit cards.

How the history of credit cards changed

• Magnetic strip technology came in 1970. This increased the security of credit cards and cleared the way for electric authorization.
• Microchips started being used in credit cards in the 1990s. This made it more difficult for fraudsters to clone or manipulate data.
• The 2000s saw the advent of the Internet and e-commerce platforms. This revolutionized the way credit cards were used.
• Contactless technology came in the 2010s. This has allowed cardholders to make fast and secure payments by simply tapping their cards.
• In the last few years, the integration of credit cards with digital wallets and mobile payments has created a sensation. This has led to a further increase in credit card usage.
• The usage of credit cards is expected to increase further when they are linked to UPI. Currently, this facility is limited to RuPay credit cards only.