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A brief history of credit cards

December 4, 2017

We have spoken about the phenomenon of credit cards several times in other blogs but this article from the BBC speaks very succinctly to the history of credit cards and how we have become so indebted.

Credit cards are the most popular and convenient form of credit on the market. In many circles they are regarded as less important forms of credit than other types of lending – such as loans and mortgages. Rightly so, credit card repayment terms are ridiculous and they are made very easily available to people who probably ought not have them.

In the end credit cards are a big numbers game – if everyone has one the risks are mitigated by the relatively low frequency of default. For example, if the lender puts out 100,000 credit cards as many as 6,000 may file a bankruptcy, while another 2,000 may just abscond without paying and a further 12,000 may need a collection agency to collect some or all the money payable. (note: I made those numbers up but they are probably close to reflective of real world numbers)