Credit Cards
Frank McNamara, NY, NY 1950
Diner’s Club
Many can remember traveling before credit cards became common in the ‘60s and ‘70s. Troupers had to carry cash (risking loss or theft), checks (few would accept out-of-town ones) or buy traveler’s checks that functioned as cash but were not universally accepted.
Store cards or charge cards at specific establishments began with Sears in 1911 but McNamara’s Diner’s Club card was the first to be honored at multiple businesses. It certainly had a humble beginning – fourteen restaurants in Manhattan and only a few hundred cardholders – but the plastic age had begun. There were 20,000 Diner’s club members within a year, over a million by the mid ‘60s.
Today, we whip out that tiny piece of plastic to pay for food, transport, lodging, clothing and thousands of other goods and services. In the U.S. alone there are 54.8 billion such transactions annually, 150.15 million daily. Do the math further and you’ll come to 1,739 transactions per second. And yes, the processing outfits use AI, how else would you suggest they keep up? Consider that if you are feeling put upon whenyour transaction’s processing takes a few extra seconds.
Over 1.25 billion people worldwide carry at lea least one credit card, We are a global shopping society, armed with tiny plastic pieces.
Increasing numbers of businesses will not accept cash, only cards, which is certainly convenient but it also provides Big Brother and whoever else is interested with a record of your spending.
This worldwide financial system is linked electronically in vast networks continuously processing millions of transactions. Let’s not ponder the repercussions if that system were somehow hacked, damaged, or destroyed. Given this possibility it’s a good idea to keep some cash on hand, just in case. I’ve also noticed some businesses will give a discount for cash on the barrel head. It never hurts to ask.
Don’t get warm and fuzzy over the four major card concerns, they are not extending credit out of kindness, they are raking in billions annually in fees and interest charges. First, there’s the 1.5-3.5% fee a merchant is charged each time you use a card for a purchase.
As of 12/31/2023, Americans owed credit card companies $1.13 TRILLION. Some 49% of credit card holders carry a balance every month and are forced to deal with an average interest rate of 20.7%. About 25% of Americans make only the minimum monthly payment. Thus if you are carrying a $6,000 balance (which the average American does) and make just the minimum payment it will take you decades to reach a zero balance, enriching them many times $6,000 over the years.
Many folks pay late so the card issuer racks up a hefty fee. The interest rates charged range up to nearly 30%, so if your balance is the $6,000 average for those not paying the full amount, that’s nearly $180 in monthly interest alone. There are various other fees and surcharges possible, so cry not for these massive corporations. Visa has 40% of the market, the others (Mastercard, DiscoverCard, American Express) split the remaining 60%. DiscoverCard bought Diner’s Club 16 years ago
And the use of these cards provides purchase data to these companies and the retailers, all collecting and selling consumer data. Thus, every plastic purchase provides material for the data miners to process, package and provide to sellers.
Does Americans’ debt to credit card corporations remind you of the U.S. deb to China. We all hope neither the corporations nor China calls in the loans oand says if they are not paid we’ll start foreclosures.
And Mr. McNamara? He thought credit cards would be a passing fad and sold out in 1952 for far less than he would have received by waiting just a few years.
Wow. Thanks for this timely summary info!