The history of Credit Cards in the 80s and 90s

80s and 90s credits cards

Are you seeking the history of credit cards? If so, you aren’t alone. Credit and debit cards have become an integral part of our lives. However, many folks wish to know the history of this amazing revolution. When was the first time the cards were introduced? How did those cards look like and the working thereon? This point holds more in the case of enthusiasts who’re applying for their first card.

The beginning of the first credit card

80s credit cards

Most of us think that credit cards might have been a couple of decades old. Right! Well, that’s not correct! The introduction of these cards has had its origin for many decades. What’s a credit card? Put simply; it’s a means of credit extended by the card issuer to the cardholder. You get to use the credit that comes with the card and are obliged to return the money within the designated time. Late payments entice fines. The model of lending isn’t new. It only evolved with time. The first line of credit dates back thousands of years. Here, merchants used to extend credit to customers to sort their finances for purchases. The best example of credit in the past was farmers were sold seeds on credit on terms that they’ll repay the money on the harvest. The popular examples of written credit include the code of Hammurabi (today’s Iraq). These laws include rules for loaning and repaying money and how interest should be charged.

Historically, a loan used to be a financial agreement between a single merchant or a creditor and a single borrower. Today, a customer can run a tab’ with a merchant. This is a wonderful example of a revolving line of credit, and it can be borrowed against with no fixed payoff date. Such credit is equivalent to the store credit card. However, that’s not a part of a large payment network.

How did earlier credit cards look like?

80s credits

In the beginning, credit cards worked just like the previous coins, plates, and medals. Merchants would imprint a card, which was familiar to anyone who remembers how credit card purchases were made until the 1990s. By the 1930s, medals and coins evolved into metal cards. However, it was in the 1940s when air travel credit cards were introduced. They mimic the cards that you find today. This first credit card allowed travelers to buy tickets on credits from various airlines. In 1950, the Diner’s club initiated the first modern credit card. Users were able to use the Diners Club credit card at several retailers. However, in the 1980s, card issuers included a magnetic stripe on the back of the card. The stripe could be read by computer equipment; it was state of the art at that time.

Did the 80s have credit cards?

Of course, the 80s saw a massive transformation of credit cards. In the 1980s the financial services industry witnessed a boom, making it a more competitive time for card issuers and banks to introduce their new products. During the 80s, travel cards such as frequent flyers, car rental, and hotel rewards programs became highly popular, and these products continue even today with modifications.

Names of credit cards and the dates of release

Mastercard, Visa credit card, and American Express introduced premium credit card products between 1980 and 1985. Amex appealed to a more affluent group of customers. The debut of the Platinum American card from American express in 1984 solidified this fact. During that period, the card enticed a 250-dollar yearly fee. However, users enjoyed a slew of services on the card, including 24-hour concierge service, access to private clubs, and travel insurance. Up to this point, most cards were aspirational products targeted at premium customers. However, Discover bucked the trend by introducing the no annual fee Discover card in 1983. The card gained immense popularity in an ad during the Superbowl XIX in 1985. From 1985 to 1989, many co-branded and affinity cards were launched. In 1986, Continental Airlines buckled up with Marine Midland Bank on the TravelBank Gold MasterCard. A year later, American Airlines joined hands with Citi on a card.

Finally, the mid-80s saw the launch of credit card-related rewards programs. Diners Club Credit Card Rewards is a special mention here. While the history of credit cards dates back to 1930 (metal credit cards), the 1980 decade marked the popularity of various credit cards between card issuers and users alike. Those new products and reward programs set the trend for the upcoming decades that we see today. In a nutshell, the travel industry accounts for the boom in the credit card industry. Also, the promotion of cards at mega-events such as sports paved the path for widespread usage.

Top credit cards in the 90s

The credit cards of the 80s continued in the 90s era. Mastercard, Visa credit card, and American Express retained their popularity. The truth is they became more popular among users at large. The card issuers made amendments to entice even those in the upper middle-income groups. So the focus shifted from affluent to less affluent and affluent, thus attracting more users.

Names of credit cards and dates of release

The 1990s witnessed two major changes in the credit card rewards programs. Those changes related to the physical card themselves and the programs redeemed by users on miles. Amex kicked off the 90s era by introducing the membership miles program in 1991, and it’s the precursor to the modern-day popular membership rewards program.

If we take a look at those seven Amex transfer partners, we can see that only two of them are in business now, Southwest and Delta. Northwest, Midway, Pan Am, and MGM Grand Air are no longer in circulation. Over the years, the program has gone various changes. Note that Amex struck the era with gold by introducing a new idea of transferable points. Many card issuers followed this norm in some form or the other.

How were cards used in the 80s?

In the 1980s, most cards were meant for the wealthy. Still, some card issuers targeted middle income-groups with low or zero annual fees. No matter the charges, many credit cards were used for travel purposes. Buyers would enjoy free car rentals and hotel rewards on some cards. However, a significant number of cards were used for travel.

The difference – now and then

Today, credit card usage has gone drastic changes. Back then, these products were limited to airlines and hotels. Now, the scene has changed on many fronts. Firstly, even an average salaried individual or small business owner can get a credit card. Also, the usage isn’t restricted to airlines. Instead, cardholders are allowed to use the card for various chores such as booking a movie ticket, making major purchases, vacationing, and a lot besides. The amount limit varies from person to person and issuer to issuer. One important point is many issuers allow free usage of credit for a specified time. If you use the money and repay it within the designated period, you pay 0 percent interest. However, late payments attract interest and fines.

Were debit cards used in the 80s?

Unlike credit cards, debit cards don’t have a long history. They were introduced in the mid-70s. However, their usage picked up in the 1980s, with more and more ATMs cropping all over the place. Back then, ATM-based cards were called debit cards. However, modern debit cards are multi-functional, and cardholders can use them at stores, ATMs, restaurants, and other places.

Names and years of debit cards

During the 1980s, only banks and credit unions would issue debit cards, and those cards would carry the bank’s name. The practice prevails even today. However, Visa credit card, MasterCard, and American Express partnered with major banks during the 80s era. So, those cards gained immense popularity during the early introduction of debit cards. Today, even a store issues its own debit card to customers for purchases. Such cards carry a certain amount of discounts to entice users.

Credit card interest in the 80s

In the 80s, the interest rate was 17.3 percent. At that time, the discount rate charged by Federal Reserve was 11.5 percent on loans, and the prime lending rate stood at 15 percent. Today, the discount rate on loans is 3.5 percent, and the prime rate is 7.75 percent. Even today, credit card interest stands at 17.34. So, credit cards are more expensive today.

How did credit cards work in the 80s?

In the 1980s, many retailers in the US would accept cards using a knuckle-buster – a device operated by hand. The machine used to take a carbon copy impression of the credit card user and generate a receipt for the customer to sign.

How did credit card machines back in the 1980s? Did a credit card have funds?

In those days, credit cards didn’t have the funds. Also, technology was limited. So, a slew of steps was involved in usage. A clerk used to check the card number on the sheet of stolen/lost cards. In case the card wasn’t listed on the sheet, the cardholder would go ahead with the transaction. Also, if the sale accounted for 30 dollars or more, the clerk would call MasterCard or Visa for phone authorization. After authorization, the transaction would proceed. The credit card used to go on the embosser. The clerk would pull hard on the roller to get the card imprinted onto the form. The customer would sign the form. The clerk would compare the two signatures. If all were fine, the clerk would take off the binding slip holding the three copies. One copy would be given to the customer, one to the merchant, and the third to the card issuer. Still, thefts would take place. Robbers would break into malls and have access to thousands of cards with signatures on the carbon paper. Today’s cards are well protected with double authentication and other safety measures in place.

Bottom line

Getting familiar with the history of credit cards and learning the concept can be handy. It lets you bag a better deal, especially when applying for your first credit card. While these cards have evolved with time, the underlying principles remain the same. Go through the evolution of credit/debit cards and find out the options you’ve today. That should help you make the best choice without denting your finances. Stay tuned for more updates.


I am a blogger that was born in the 1980's. So I decided to write about the 1980's because I feel that was one of the best decades ever.

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