Credit cards are a significant part of the shopping lives of many people. They are convenient, secure and, in some cases, come with rewards that make their usage quite appealing. But, there are some surprising facts about credit cards that many people have not heard of. Come with us on seven facts that you probably did not know about credit cards in this article.
The Surprising History of Credit Cards: From Charge Plates to Digital Wallets
Credit cards have really changed! The first credit cards appeared in the 1920s when oil companies and hotels started to offer their customers a certain amount of credit. However, it was not until the 1950s that the first modern credit card appeared – the Diners Club card. This pioneering card enabled customers to make purchases from different merchants thus paving way for the development of the credit card industry. Today.
Over the years these cards have moved from the charge plates made of metal to the plastic cards that are used today and up to the digital wallets. Some applications like Apple Pay and Google Wallet allow us to make payments by our smartphones thus improving the security of the transactions.
How Credit Card Companies Make Money: The Truth About Interest Rates and Fees
The main source of revenue for credit card companies is interest and fees. If you do not pay off your balance every month, you may be subjected to interest rates of up to 25%. That makes credit card debt one of the most expensive forms of debt available!
Along with interest rates, these companies also charge fees for various services including late payment, cash advance, balance transfer and foreign transaction. It is easy to see how such fees can add up and become a major source of revenue for them.
The Hidden Benefits of Credit Cards: Rewards Programs, Purchase Protection, and More
Not many credit card owners may well know all the advantages that come with their cards! The most popular incentive is the credit card rewards programs. It is the credit card companies’ way of appreciating the consumers by giving them cash back, points or miles which they can redeem for airfare and purchase of other goods and services.
In addition, it is important to mention that almost all the credit cards provide purchase protections. This can include extended warranties, price protection, and fraud protection, to give you peace of mind, together with those rewards.
