The proliferation of credit cards happened before the proliferation of the internet. How did credit cards work before the internet?
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They worked over phone lines in the 80 and 90s.
Before that in the 70s and some of the 80s they would put your card in a device that would have carbon paper in it. The credit card had raised numbers and name info. They would slide the carbon paper over the card which would make a copy that the store would then send to the company for reimbursement. They would then charge the customer.
Early on a carbon copy was made with a “knuckle buster”. Credit cards had raised numbers on them that would get transferred in triplicate. You had to write the amount. Customer signed. Then one copy for the customer, one for the business and one was deposited at your bank. Later, electronic machines would utilize the phone lines and dial up a computer at the bank and make the transaction.
The earliest cards you would take an [impression of the card](https://imgur.com/lYjFzrV) and at the end of the month the retailer would mail in their credit card slips and get a check back for the charges. Think of this as really being “credit”. A retailer would extend you credit because they knew they’d get paid back at the end of the month from your card company.
The next step was transmitting card transactions via phone lines. Just modems sending the info back and forth. Modern transactions work mostly the same way, but instead of phone lines, they use the internet.
Stores would “run” a card by using a small machine that made an imprint of the card number on paper and then they’d send those forms to the credit card company for billing.
The credit card company would pay the store and then bill the customer.
But then they started using phones to relay the account number to ensure the credited amount would be authorized.
And then POS terminals got connected to the internet and the system modernized to what we know now.
Back in the very early days, they were used manually – a cashier would write out the information by hand. Eventually they came up with an [imprint machine,](https://encrypted-tbn0.gstatic.com/images?q=tbn:ANd9GcTSrs-FFjm1cm_r40EmogcNPYJBwuyCtxzB-xAao1OOCwlNbOoNBj4fvypzXXL1CtcOuA8&usqp=CAU) so that they could fill out the amount on the form, imprint the credit card for verification, and then mail the form to the bank to get paid. And later on, credit companies would have dedicated phone lines, where they could call up and a representative would say “Yes, we will approve that transaction.” When I was a kid, they’d still do that on big transactions,
Eventually, they invented the magnetic stripe so that the information could be read digitally, and even before the internet was big, credit card machines would transmit this information to the credit company through the phone lines and have it verified. The internet makes it all faster, but there has always been a process!
Back in the old, old days, you would hand your card over and the vendor had a little roller machine they put your card in with a carbon copy slip with 4 (I think) copies. They entered the details of the sale on the slip, rolled the machine over the slip and your card which imprinted your card details on the slip (this is why card numbers are raised, so they imprint on the slip). Then you sign the slip, take a copy, the vendor kept a copy and the other copies went to banks, which treated it essentially as a kind of cheque to draw on your account, with the card services (Visa, mastercard, Amex etc) operating as the go-between for the banks.
If the transaction was large, the cashier would call the card company for authorisation first.
Then they started using the magnetic strip on the back, which doesn’t depend on “the internet” as you know it, but just a data transfer for the point of sale system.
And then chips, and then NFC chips, and now you don’t even need the card.
And to check if a card was good or not (e.g. stolen, over limit) we we would receive small books with a listing of the credit card numbers (quarterly if I remember correctly). The paper was really thin, the font was really small, and I had to use a ruler to make sure I was reading the correct number all the way across.
How did checkbooks work before the Internet? Society used to put a pretty high premium on trust. And there was also a cost to dishonesty. Check fraud was a felony. We have optimized accountability out of the equation.
Originally, they were placed on a tray, and a ruler made it from print onto carbon paper. The paper receipts were mailed to the credit card companies. For a long time after that, they worked over phone lines.
Weren’t the first credit cards actually store-specific? I remember parents telling me how hard it was for them to apply and get their first credit card as a young married couple (and I think my Mom couldn’t get one on her own.) And it only worked in sears.
They thought how funny it was that then their (late) teen kids got credit card companies sending us come-ons in the mail with ridiculous credit limits, trying to prey on young people.
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