The proliferation of credit cards happened before the proliferation of the internet. How did credit cards work before the internet?
In: 155
Before the internet, credit cards still worked essentially the same. The merchant captured the card number on an imprint machine that used carbon paper slips. A copy was sent to the card issuer, who would then put it on the customer’s credit card statement a while later. Then they paid the merchant the funds the customer owes them.
It was a lot slower, and it was less secure, meaning you could go over your credit limit and a merchant might still accept your card (sometimes knowingly). Eventually, merchants were required to phone the card issuer for authorization, especially over certain amounts.
This is also why signing the back of the card was important. To prevent stolen cards, merchants would ask to see secondary ID like a drivers licence and then compare the name and the signatures on the card and the credit card slip.
As you can imagine, the system had many, many issues and gaps by today’s standards.
Latest Answers