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Chapter 8. CREDIT CARDS > Don't Leave Home Without It

Don't Leave Home Without It

About eight years after the Diners Club experiment, American Express decided people should not leave home without one of their cards and they joined the credit card business. To be perfectly clear (as Richard Nixon used to say), their card is not a credit card, but rather, like the first department store cards and the Diners Club cards, a charge card because the amount you charge on an American Express card must be paid in full each month.

Credit cards became increasingly popular with the advent of the bank credit card system that we now know as MasterCard and Visa. Visa, which in 1959 was called BankAmericard, was the first national bank credit card company to set up a system by which the individual banks involved credited the accounts of merchants with whom they had accounts when BankAmericard received the sales receipts. The banks that made up BankAmericard paid the stores immediately. At the end of the billing period, the cardholder received a monthly statement from BankAmericard showing all his or her charges and had the option to either pay the entire account in full or pay a required minimum along with interest on the unpaid balance. Master Charge, which later changed its name to MasterCard, soon began following suit, and an American way of life was born.


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