Credit cards are a big part of our everyday lives, but how much do we really know about them? From their humble beginnings to their role in building your credit score, credit cards have a fascinating story—and a lot of secrets! Let’s dive into 10 fun and helpful facts about credit cards that’ll make you sound like a pro the next time the topic comes up.
1. The First Credit Card Was Made of… Cardboard?
Yep, you read that right! The first credit card was created by Diners Club in 1950, and it wasn’t the sleek plastic you carry around today—it was cardboard! It could only be used at a handful of New York City restaurants, but it paved the way for modern credit cards.
2. Your Credit Card Number Has a Secret Code
Ever wonder why your credit card number is so long? It’s not random! Credit card numbers follow something called the Luhn algorithm. This little trick helps validate the numbers and prevents errors during transactions. Pretty smart, right?
3. Over a Billion Credit Cards Are in Use Worldwide
If you think you’re the only one using a credit card for everything, think again! In 2017 alone, there were over 1.65 billion credit cards in circulation. Visa led the pack with 827 million, followed by Mastercard and American Express. Talk about a global trend!
4. Magnetic Stripes Were a Game-Changer
Believe it or not, credit cards didn’t always have that little magnetic stripe. It wasn’t until the 1970s that this feature was added, thanks to an IBM engineer’s wife who suggested using magnetic tape. This tech made credit card payments so much easier—and we’re still swiping (or tapping!) today.
5. The First Two Digits Reveal a Lot
Your credit card number isn’t just a bunch of random digits. Those first two numbers actually reveal which industry issued the card. For example, cards starting with a “4” are from Visa, while “3” usually means travel and entertainment. Cool, right?
6. Most People Are “Convenience Users”
Did you know that around 60% of credit card users are what’s called “convenience users”? These folks avoid paying interest by paying off their balances in full every month. It’s a smart way to use credit cards without getting into debt—and definitely something to aim for!
7. Grace Periods Can Be Your Best Friend
Speaking of avoiding interest, many credit cards have a grace period. If you pay off your balance in full before the due date, you won’t get hit with those dreaded interest charges. Just double-check your card’s terms because not every card offers this perk.
8. Fraud Protection Has Your Back
Worried about fraud? Don’t be! Federal law caps your liability for unauthorized charges at $50, and many credit card companies go even further with zero-liability policies. So if your card gets hacked, you’re likely covered.
9. Closing Cards Can Hurt Your Credit Score
Thinking about canceling that old card you never use? Be careful! Closing a credit card can shorten your credit history, which can ding your credit score. Instead, consider keeping it open and using it for small purchases now and then.
10. Sending Cards Unsolicited Was Once a Thing
The first mass mailing of credit cards happened in Fresno, California, when BankAmericard (now Visa) sent cards to 60,000 people. Can you imagine just getting a random credit card in the mail? That practice is illegal now, but it’s a fun bit of history.
Why It All Matters
Knowing these little facts about credit cards isn’t just fun—it’s useful. Whether it’s understanding grace periods to avoid interest or knowing why you should keep that old card open, these tips can help you make smarter financial decisions.
Credit cards are a great tool when used wisely, so keep these tips in mind and use them to your advantage. The more you know, the more you’ll get out of that little piece of plastic in your wallet!
