Credit Card Changes the World

Credit card changes the World

In the 1980s, an innovative invention, the credit card, was introduced and then changed the payment method over the globe. From then on, the usage of the credit card increased rapidly throughout the globe and it stimulated the consumption. In the current social circumstances, this transformative invention is still changing our life and has become an indispensable part for every citizen. This essay will discuss how credit card changed money settlement method, how the conditions at that time made credit card to become a success and the lasting impact of this plastic card.

The credit card revolutionized the consumer buying behaviour as it dramatically enhanced the ease and the convenience of purchasing goods and services. Before the invention of the credit card, people used to trade with banknotes and coins which are heavy and space-consuming. With credit cards, people could easily settle their payments in dining rooms, outlets as well as supermarkets without using cash (Durkin, 2000). In addition, it served as a payment method for some transactions that would be inconvenient to pay with cash. For example, paying for online transactions which required shoppers to settle their payments through credit cards. Using the credit cards could also reduce the need for exchanging the banknotes with a large face value to their counterparts with a smaller face value. It enhanced the efficiency of the transactions as well, as it required less time to calculate the changes. It is easy to see that the usage of credit cards was increasing and people tended to buy more as it raised the easiness to purchase.

Credit card issuers provided both monetary, credit card reward scheme; and non-monetary, satisfying the need, incentive which enabled the credit card to become a success. The card issuers tried to encourage consumers to use more cards by offering some monetary incentives such as special discounts and cash rebates. (Meehan, 1990) By doing so, it provides more benefits to buyers whenever they purchase. Moreover, credit card provided greater flexibility to shoppers as it allowed people to purchase without sufficient cash on hand. (Khare, Khare, and Singh, 2012) In bygone days, it took a long time for people to save enough money to buy a luxury bag, but nowadays, if somebody wanted to buy a luxury, He could pay it on credit and settle his liabilities by a few installments without paying any extra interest expenses. Due to these reasons, the usage of credit card rocketed in the past 10 years and people tended to spend more in hopes of getting rewards, both monetary and non-monetary.

This innovative idea of credit card is still having a long-lasting impact on the world. Not only because it accelerates transactions between buyers and sellers, but it also the enhances the ease of online payments and increases the usage of electronic wallets. With the increasing usage of the credit cards, more and more banks start to issue them to their clients and this leads to a fierce completion among commercial banks all over the world. In order to differentiate themselves from the others, card issuers start to develop some new functions, online payments and smartphone applications in particular. A most recent service, electronic wallet, is launched by some large credit card companies, for example, Visa, Master card, and the China Union Pay. The brand new payment method enables the users to make a deal by simply tapping their smartphones to a connector at the checkout counter. (“Apple pay launches today,”2016) In addition, online payment by credit cards is welcomed by both buyers and sellers as it enables the buyers to finish their transactions anytime, anywhere. The credit card and its developments accelerate the transactions. It seems that the success of the credit card and its development is ensured in the future.