The credit card turns 40

TUESDAY, JUNE 27, 2006

This week sees the 40th anniversary of the credit card in the UK, so we thought we would write a little on the history of the credit card and its use in the UK.

The first credit card introduced in the UK was the Barclaycard, issued by Barclays Bank. Barclays sent one million unsolicited cards to customers who were thought likely to use the card responsibly. At this time most people in the UK didn’t have a bank account even, and paid for everything by cash. Also there was little support for the new-fangled credit cards with the point of sale machines being either scarce or restricted in usage to selected staff.

At this time, credit card bills were paid off in full at the end of the month, but a change in UK legislation allowing credit card companies to offer extended credit saw their use take off.

In the early 1970’s a consortium of UK banks including Lloyd, the Midland, and Nat West got together to launch a rival credit card known as Access.

Today the consumer can choose from over 1300 different credit cards, and there are some 75 million credit cards and other charge cards in the UK alone. In 2005, shoppers spent over £60 billion on credit card purchases, with the number of online purchases increasing.

Credit card borrowing can be a relatively expensive way to borrow money though, and their usage is declining as more and more people switch to debit cards. People who are heavily in debt due to credit card spending could well save money on a debt consolidation loan. In any case, anyone struggling with credit card debts would be advised to see professional debt advice.