Cards

Once upon a time, in the year 1958, a quiet revolution began in the world of finance. This was the year when the concept of credit cards was first introduced. It all started with the launch of the BankAmericard by the Bank of America and the Charge card by American Express. American Express focused on the travel and entertainment market, while BankAmericard aimed at the general consumer market. Little did they know that this humble piece of plastic would evolve into a financial juggernaut, changing the way people conducted their transactions forever.

In the early years, the credit card was a simple piece of cardboard, allowing cardholders to make purchases on credit in few places. As the years rolled on, the idea caught on, and by 1966, BankAmericard had transformed into the modern-day Visa card, expanding its reach outside California state lines. The concept of paying for goods and services with a small piece of plastic was spreading like wildfire.

Meanwhile, in 1967, the Master Charge (now known as Mastercard) was born, created by a group of California banks. This marked the beginning of fierce competition in the credit card industry. More players joined the game, offering various features and rewards to attract cardholders.

The 1970s saw a pivotal moment in the evolution of credit cards. Magnetic stripes were introduced, allowing for electronic processing of transactions. The days of making manual carbon copies of the credit card were gone. With the advent of electronic processing, credit cards were becoming more convenient and efficient. As the years passed, technology continued to play a pivotal role in the credit card industry.

In 1973, Diners Club International introduced the world's first charge card with no annual fee, setting a trend that many other card issuers would eventually follow.?

The 1980s and 1990s marked a period of rapid expansion for the credit card industry. Credit cards were no longer restricted to national borders; they became international, making it easier for people to travel and make purchases abroad. Cardholders could now shop, dine, and travel with ease, without the hassle of exchanging currency. By the 2000s, online shopping became increasingly popular. People could now make purchases from the comfort of their homes, using their credit cards to pay for everything from groceries to electronics. E-commerce had revolutionized the way people shopped.

Today, in 2023, the plastic card that was once revolutionary has evolved into a virtual entity, stored within our smartphones, smartwatches, and even our smart glasses. With a simple tap, swipe, or scan, we can make payments, manage our finances, and enjoy the convenience that was unimaginable in 1958.

Let's look at the governing laws of the credit card industry!

• The Truth in Lending Act (TILA) of 1968: This law requires credit card companies to disclose the key terms and conditions of the credit card in the application or solicitation, such as the annual percentage rate (APR), fees, grace period and minimum payment. It also requires credit card companies to provide periodic statements that show the balance, payments, charges and other information. TILA also gives consumers the right to dispute billing errors and unauthorized charges.
• The Fair Credit Billing Act (FCBA) of 1974: This law is an amendment to TILA that provides additional protections for consumers who use credit cards. It requires credit card companies to promptly acknowledge and investigate billing complaints, and to correct any errors or refund any charges within a specified time frame. It also limits the consumer’s liability for unauthorized charges to $50 per card.
• The Fair Credit Reporting Act (FCRA) of 1970: This law regulates how credit reporting agencies collect, maintain and share consumer credit information. It gives consumers the right to access their credit reports, dispute any inaccuracies and request a correction. It also requires credit card companies to notify consumers if they are denied credit or charged a higher interest rate based on their credit report. It also protects consumers from identity theft by allowing them to place fraud alerts and freezes on their credit files.
• The Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009: This law is a comprehensive reform of the credit card industry that aims to protect consumers from unfair and deceptive practices. It limits credit card fees and interest rate increases, and requires credit card companies to give cardholders more time to pay their bills and more notice before changing the terms of the agreement. It also prohibits certain practices such as double-cycle billing, universal default and retroactive rate increases. It also restricts the marketing and issuance of credit cards to young consumers under 21 years old.
• The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010: This law is a response to the financial crisis of 2008 that created the Consumer Financial Protection Bureau (CFPB), a new federal agency that oversees the enforcement of consumer financial laws, including those related to credit cards. The CFPB has the authority to issue rules, conduct examinations, investigate complaints and take enforcement actions against credit card companies that violate the law.
• The Electronic Fund Transfer Act (EFTA) of 1978: This law protects consumers who use electronic methods of payment, such as debit cards, ATM cards and prepaid cards. It requires financial institutions to disclose the terms and conditions of these services, and to provide periodic statements and receipts. It also limits the consumer’s liability for unauthorized transfers to $50 if reported within two days, or $500 if reported within 60 days. It also gives consumers the right to stop payment on preauthorized transfers.
• State laws: In addition to federal laws, some states have their own laws that regulate credit cards, such as usury laws that limit the interest rates that can be charged, or consumer protection laws that prohibit unfair or deceptive practices. These laws may vary from state to state, and may offer more or less protection than federal laws.

Type of cards :

• Credit card : It's a plastic or metal card that allows the holder to borrow money from a bank or financial services company.
• Prepaid card : A prepaid card is a card that you can use to pay for things. You buy a card with money loaded on it, and you can use the card to spend up to that amount. Prepaid cards are also called prepaid debit cards or stored-value cards.
• Store card : A store card is a credit card that can only be used at specific stores. Example - Target RED card, My Best Buy Credit Card.
• Gift card : A gift card is a prepaid debit card that contains a specific amount of money or credits. It can be used to make purchases at retail stores, gas stations, restaurants, and other locations.
• Student credit cards : These are basic cards thats tailored for young people with a limited credit history. Application requirements aren’t so stringent, so it’s easier to get approved.
• Secured credit cards : With secured credit cards, you’re required to put down a cash deposit in order to secure a small line of credit, usually for a similar amount. For example, you might sign up for a secured credit card and put down a $500 initial deposit in order to receive a $500 line of credit.
• Co-branded card : A co-branded credit card is a hybrid between a store card and a rewards card. They are sponsored by two parties, usually a retailer and a card issuer or card network. They usually bear the logos of both parties. Example - Hilton Honors American Express, Amazon Visa.

What are Card Numbers?

Card numbers are the identifiers found on payment cards, such as credit cards and debit cards. They are composed of 8 to 19 digits, depending on the issuer.

• The first digit is the major industry identifier (MII), which indicates the type of industry that issued the card. For example, 3 is for travel and entertainment, 4 is for banking and financial, and 6 is for merchandising and banking.
• The first six or eight digits of a card number are the issuer identification number (IIN) or Bank Identification Number (BIN), which identifies the card issuing institution or network. For example, Visa cards start with 4, Mastercard cards start with 5, American Express cards start with 34 or 37, and Discover cards start with 62. The IINs are allocated by the International Organization for Standardization (ISO) according to ISO/IEC 7812 standard.
• Bin ranges are the series of intervals that divide the entire range of values of a dataset into bins or groups. They are used to create histograms, which are graphical representations of the frequency distribution of a dataset.
• The bin ranges for card numbers are determined by the IINs and the MIIs. Each IIN or MII has a specific range of values that it can start with.

• Visa cards can start with any value from 400000 to 499999
• Mastercard cards can start with any value from 510000 to 559999 or from 222100 to 272099
• American Express cards can start with any value from 340000 to 349999 or from 370000 to 379999
• Discover cards can start with any value from 601100 to 601199 or from 622126 to 6229256
• The bin ranges for card numbers are controlled by the ISO and the payment networks. The ISO maintains a registry of IINs and MIIs and assigns them to different issuers and industries according to ISO/IEC 7812 standard.
• The payment networks, such as Visa, Mastercard, American Express, and Discover, also have their own rules and guidelines for issuing and managing card numbers within their networks.
• The bin ranges for card numbers are followed globally by all issuers and merchants that accept payment cards.
• The remaining digits of a card number, except the last one, are the individual account identifier, which is assigned by the issuer to identify the cardholder and their account. The last digit is the check digit, which is calculated using the Luhn algorithm to verify the validity of the card number.

Card Penetrations - Top 10 countries

Story continues..

We originated from a single cell, multiplied, formed complex systems and now so-called intelligent beings!

Likewise, a rectangle in 1958, multiplied, formed complex networks that runs 24*7, embedded with integrated circuits and now virtual cards, the story of the cards continue.

Both humans and credit cards have evolved to adapt to changing environments. Human evolution over millions of years involved physical and genetic changes to better suit their surroundings. Credit card evolution, on the other hand, involves technological advancements and security measures to adapt to changing financial and technological landscapes.

It's not an exaggeration to say, when we become multi planetary, so as our invention - i.e credit cards!

https:/www.nerdwallet.com/article/credit-cards/how-to-decode-credit-card-number
https:/money.usnews.com/credit-cards/articles/what-does-your-credit-card-number-mean
https:/www.nerdwallet.com/article/credit-cards/how-to-decode-credit-card-number
https:/www.findlaw.com/consumer/credit-banking-finance/credit-cards.html
https:/www.nerdwallet.com/article/credit-cards/credit-card-act
https://www.bankrate.com/finance/credit-cards/different-types-of-credit-cards/
https://www.worldbank.org/en/home