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Video: The History of Credit Cards



Today, credit cards are one of the most important sources of big bank profits. However, a look at the history of credit cards shows that things weren’t always that way.

The History of Credit Cards

While it may seem today that credit is impersonal and calculated, credit was once a privilege built around personal trust and long-lasting relationships. In the late 19th century, stores began offering credit to their best and most trustworthy customers. Instead of paying each time they visited the shop, a regular could defer payments to the future by using store-issued metal coins or plates that had their account number engraved. Shops would record the purchase details, and add the cost of the item bought to the customer’s balance owed.

By the 1920s, shops started issuing paper cards instead of metal plates, but even these became cumbersome. Consumers had to hold different cards for each shop, and this made the sector ripe for disruption.

Diners Club, the first independent credit card company in the world, did just that in the 1950s. Their cards allowed people to make travel and entertainment purchases, even with different vendors.

Bank of America took this idea and ran with it, forever changing the history of credit cards. They launched the “BankAmericard” in Fresno, California, by sending it out to all 60,000 residents at once. Soon all consumers and vendors in the city were using the same card, and the concept of mass-mailing cards to the public spread like a wildfire.

After these risky mass mailings of credit cards eventually culminated in the Chicago Debacle of 1966, they were outlawed in the 1970s for causing “financial chaos”. With no applications required, many people including compulsive debtors, crooks, and narcotics addicts were able to receive easy credit. By the time such mass airdrops became illegal, 100 million cards had already been unleashed on the U.S. population without a need for an application.

In 1976, the BankAmericard system eventually became Visa. It was soon after this point that credit cards would enter their golden age for banks: as savings rates fell in the early 1980s, the interest rates on debt did not. Credit cards became a “cash cow”, and they’ve been a key source of bank profits ever since.

Today, 80% of U.S. households own multiple cards, and they account for just under $1 trillion of consumer debt.

Original video by: &Orange

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Visualizing California’s GDP Compared to Countries

California’s GDP makes the state one of the most powerful economies in the world. This graphic compares it to the GDP of 10 select countries.



How California's GDP exceeds ten select countries

How California's GDP exceeds ten select countries

California’s GDP Compared to Countries

Comedian Trevor Noah once said America is fifty little countries masquerading as one.

From an economic sense, this might carry some truth. When looking at the economic output of each state, especially the largest and wealthiest ones, they often compare to or even exceed the GDPs of entire nations.

To illustrate, this visual from StatsPanda looks at California’s $3.36 trillion GDP using data from The World Bank and compares it to 10 sizable country economies. Let’s take a closer look.

Sizing Up California’s GDP in 2021

California’s $3+ trillion GDP is an enormous figure in its own right, so it’s no surprise that it is larger than certain nations’ economic output.

But even when comparing with economies like Malaysia, Colombia, and Finland, all among the top 50 countries by GDP, California stands tall.

CountryGDP (2021 USD)
🇲🇾 Malaysia$372B
🇭🇰 Hong Kong$369B
🇻🇳 Vietnam$366B
🇮🇷 Iran$359B
🇵🇰 Pakistan$348B
🇨🇱 Chile$317B
🇨🇴 Colombia$314B
🇫🇮 Finland$297B
🇷🇴 Romania$284B
🇨🇿 Czechia$281B

What’s more, these 10 countries are quite densely populated, with a combined population of 653 million compared to California’s 39 million total.

A Closer Look At California’s Economy

What makes California’s GDP so vast and their economy so powerful?

Relative population is a big factor, as the state is the most populous in the U.S. with roughly 12% of the country’s population calling it home. But since California’s GDP makes up over 15% of the country’s economic output, there must be something else at work.

One key driver is the technology sector. Not only does Silicon Valley generate massive amounts of technological output, this also translates directly to wealth and economic activity. Many tech markets follow winner-take-all dynamics, bringing large revenues back to the state. In addition, smaller technology companies are frequently gobbled up by larger competitors, adding wealth back into the mix through M&A.

This might partly explain why California’s GDP is actually estimated to overtake Germany’s in the coming years and become the world’s 4th largest economy.

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