The first beginnings of the credit card started with the use of “proprietary cards” that are launched by the merchants who wished to provide for customers services in order to enhance their loyalty and customer service experience (Gerson & Woolsey 2007).
This is followed by the initiative of John Biggins who used the “Charg-It” where the customers who used it are allowed to forward the amount to Biggins’ bank, the merchant paid afterwards, and the customer asked to pay after a period (Gerson & Woolsey 2007). A few years later, in 1949, a man named Frank McNamara paved the way for the launching of a small card that is the predecessor of what is now known as the Diners Club Card (Gerson & Woolsey 2007).
Since then, various credit card companies rose to provide for the same services to their clients together with their own terms and conditions.
Credit Card Fraud
For various countries, the trends of credit card fraud are considered to have varied in terms of the rate to which it occurs (Newman & Clarke 2003). It may be higher in some countries as compared to the others and this is due to several factors that are present with regard to both aspects of consumer, government, and the credit card companies.
In instances of credit card fraud, it is commonly the seller of the good availed who pays for the losses and not the holder of the credit card (Wang 2006). This led to a stricter implementation of several policies with regard to the privilege of using a credit card for certain establishments (Wang 2006). There are several requirements that serve as measures taken for the purpose of verifying the identity of the user and to avoid the fraudulent use of the card (Wang 2006).
Advantages of Credit Card Use
Karp (2008) enumerated three important advantages and benefits that are associated with the use of credit cards. The list includes the goal of improving the credit score, rewards that are earned through the use of credit cards, and the use of tactics for a better use of the credit card (Karp 2008).
First, diligence in terms of paying provides for a good credit history and this subsequently leads to an improved credit score for the user (Karp 2008). While it may not be often of great use, a good credit score is helpful for future plans that involve greater amounts of loans that require a good credit score (Karp 2008). In addition to this, the interest rate is likewise reduced as the credit score becomes higher (Karp 2008).
Second, several credit card companies formulate a rewards plan that provides the users the chance to earn incentives based on the terms that are provided for them as they use their credit cards (Karp 2008). This may be in the form of monetary or non monetary rewards and this serves as a great motivational tool for the credit card user as well as the potential clients.
Third, there are several strategies that may be used with the credit card to reap several benefits that are associated with it a(Karp 2008). One of this could be the continuous forwarding of debts from one card to another in order to pay lesser interests for the said value (Karp 2008).