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    Veljko Madzarac
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    The first bank cards were credit cards created in the late 1940s and early 1950s on the eastern coast of the United States. These early credit cards emerged to meet the demand for household goods purchases following World War II. The common banking product at the time was the secured installment loan, which involved consumers applying for a bank loan to purchase an item and pledging that item as security, then paying off the loan in installments. However, this process was inconvenient for both consumers and merchants as consumers had to wait for loan approval and merchants had to hold items from potential sales that might not be completed if the loan was rejected.

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    The first bank cards were credit cards created in the late 1940s and early 1950s on the eastern coast of the United States. These early credit cards emerged to meet the demand for household goods purchases following World War II. The common banking product at the time was the secured installment loan, which involved consumers applying for a bank loan to purchase an item and pledging that item as security, then paying off the loan in installments. However, this process was inconvenient for both consumers and merchants as consumers had to wait for loan approval and merchants had to hold items from potential sales that might not be completed if the loan was rejected.

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    2 views1 page

    File D Pages 1 Page04

    Uploaded by

    Veljko Madzarac
    The first bank cards were credit cards created in the late 1940s and early 1950s on the eastern coast of the United States. These early credit cards emerged to meet the demand for household goods purchases following World War II. The common banking product at the time was the secured installment loan, which involved consumers applying for a bank loan to purchase an item and pledging that item as security, then paying off the loan in installments. However, this process was inconvenient for both consumers and merchants as consumers had to wait for loan approval and merchants had to hold items from potential sales that might not be completed if the loan was rejected.

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    file:///D|/pages/1/page04.

    htm

    A brief history of the bank card business (i)


    Optional topic - click here to skip to the next topic.

    The first bank cards were credit cards, and were created in the late 1940's and early 1950's on the eastern
    coast of the United States. The economic boom following World War II created a huge demand for household
    purchases such as refrigerators, cars and washing machines, which needed to be bought on credit.

    The banking product for underwriting such credit was the secured instalment loan, which worked like this:

    Consumer selects product to purchase

    Consumer applies for loan with bank, pledging the product to the bank as security - bank can sell it if
    necessary to recover amounts owed
    Bank grants loan - consumer can now collect the product

    Consumer pays off the loan to the bank in instalments, with interest as agreed

    This process was inconvenient for both the consumer and the merchant - the consumer, having chosen a
    product, had to wait for the bank to approve the loan; and the merchant had to put merchandise aside for sales
    which would not be completed if the loan application was rejected.

    file:///D|/pages/1/page04.htm7/5/2008 6:52:01 AM

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