The proliferation of credit cards happened before the proliferation of the internet. How did credit cards work before the internet?
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Have you ever seen home alone 2 : lost in new york?
As recently as the 1990s there was a department store chain in Michigan, Jacobson’s, that accepted only its own credit card. The salesman filled out a sales form in pencil, had the customer sign it, and it went up to the accounting department. One reason for this was to keep the store quiet and not have registers and printers making a racket. I don’t know why forms were done in pencil, though.
The sales slip was three copies. Cardstock under two thin paper sheets with carbons. The middle slip was given to customer. At the data center the cardstock was keypunched with account number, date and amount, like a Hollerith card. Your monthly statement came in the mail, and would include a stack of the punched cards you could use to verify your charges.
I remember a giant book of card numbers that merchants should decline and this book was shipped out monthly. It was like a phone book.
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.
Credit cards are a way to pay for things without using cash. Before the internet, people used credit cards by taking them to a store and using them to buy things.
When you wanted to use a credit card to pay for something, you would give the credit card to the person at the store. They would then put the credit card into a special machine called a card reader, which would read the information on the credit card and make sure it was a valid card.
If the credit card was valid, the store would be able to charge the amount of the purchase to your credit card account. You would then have to pay back the money you owed on the credit card later, usually with interest.
Credit cards were very helpful because they allowed people to buy things even if they didn’t have enough cash with them. But they also had some risks, because if people used their credit cards to buy things they couldn’t afford, they could end up owing a lot of money.
With the proliferation of the internet, credit cards became even more useful because people could use them to buy things online. Today, most people can use their credit cards to make purchases on the internet, as well as in stores. The other added benefit of credit cards over other forms of payment is the layer of security credit cards provide over debit cards.
Multipart paper/carbon forms about the size and shape of a cheque, and a “card machine” jig. Card went in first; form over the top; roller whizzed along and made an imprint of the embossing on the card. Then (this obviously being pre-PIN) you signed the form to authorise the transaction. You got one of the copies; another went to the card company for processing.
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