UK Credit Card - 40th Anniversary
JUNE 30TH, 2006
| Credit Cards (introductory rate & period) |
Typical APR | Options |
| Virgin Credit Card 0% balance transfers, 13 months ( 2.9% balance transfer fee ) 0% purchases, 3 months |
15.9% (variable) |
 |
| Post Office Credit Card 0% balance transfers, 8 months ( 2.5% balance transfer fee ) 0% purchases, 3 months |
14.9% (variable) |
|
| Personal Loans | Typical APR | Options |
| Moneyback Bank Personal Loan | 5.7% | |
| Northern Rock Personal Loan | 5.8% | |
It was 40 years ago since the credit card was released to the UK consumer revolutionising our spending habits.
It was not quite a unique idea. It had already taken off in US during the 1950s with the cards known as American Express and Diners Club.
In spawned in a shoe and boot factory in Northampton when Barclays purchased a credit card system from Bank America in California. It started out as pretty much a 40 man strong department and stole an unexpected march on its rivals.
Initially a mass mailing of unsolicited cards arrived at peoples doorsteps. At first most did not know what to do with them. Some were even unhappy at the uninvited piece of plastic.
At the time the only way to pay for anything was cash or cheque at a time when the week average wage was £10. Only half the population had a bank account.
Borrowing was somewhat a hard drawn out task back then. Interviews with bank managers and filling out many forms to justify the loan. A far cry from today where we are encouraged to spend spend spend!
It still was not the easy of systems to use. A shop had to allow the form of payment. New cards had to be repaid in full when you received your monthly bill compared to the minimum payments of today.
Today there are more than 1300 credit cards available in the UK with a staggering 75 million credit and charge cards in circulation.
The current batch of credit cards are expensive in comparison to unsecured personal loans. There is however plenty of introductory interest-free offers to draw you in.
A credit card is still a great useful money tool if used in the correct way. If you pay off your spending each month they are certainly a great way of borrowing for a short period of time.
But lately many of the credit cards have been sent out by banks not even checking if a consumer can repay. This has spawned a culture of spend now think later.
Consumers are more than likely to file for bankruptcy if they borrow on credit cards than if they borrow on other things according to Professor Ronald Mann, of the Texas University Law School, author of a new book about the growth of credit cards.
The UK has seen huge increases in the amount of outstanding borrowing held on credit cards from £14bn ten years ago to £56bn today.
There is a feeling that there is currently a change in habits as debts start to kick in for many individuals. Debt always catches up.
Since the start of the year consumers have started paying more their credit cards and shift their purchases onto debit cards.
The 40th anniversary of the credit card could mark the peak of its popularity with a debt cultured public.
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