History and Impact of Credit Cards

What prompted businessman Frank McNamara to invent The Diners Club card?

• He wanted to create a new form of currency.

• He forgot his wallet when trying to pay for dinner.

• He aimed to centralize all restaurant payments.

• He sought to replace cash transactions entirely.

What distinguished The Diners Club card from previous credit arrangements?

• It was the first card to offer rewards programs.

• It allowed users credit with multiple, otherwise unassociated businesses.

• It was made of plastic instead of cardboard.

• It was the first system to track deferred payments.

What was a significant problem encountered by Bank of America when they sent out 60,000 unsolicited credit cards in 1958?

• Most recipients refused to activate the cards.

• The cards were too expensive to produce.

• It led to widespread card theft and unpaid bills.

• Customers preferred using cash for transactions.

Before the advent of computers, what was the primary challenge banks faced with processing credit card transactions?

• Lack of secure transaction methods.

• Difficulty in verifying cardholder identities.

• Overwhelming amounts of manual paperwork and delays.

• High costs associated with card production.

Why did US banks remain committed to credit cards despite initial losses and processing difficulties?

• They were legally mandated to offer credit services.

• Credit cards allowed them to attract out-of-state customers and sell other financial products.

• They received government subsidies for credit card programs.

• The technology for processing was rapidly improving.

How did banks' advertising campaigns change the American public's perception of credit cards?

• They highlighted the security features of credit cards.

• They emphasized the convenience of cashless transactions.

• They shifted the attitude from financial dependence to financial freedom.

• They promoted credit cards as a tool for emergency funds only.

What significant change occurred in 1968 that impacted credit card interest rates?

• The government imposed a cap on interest rates.

• The Supreme Court removed the cap on state interest rates.

• Banks voluntarily lowered interest rates to attract more customers.

• International agreements standardized interest rates globally.

What was the approximate total US consumer credit card debt by the end of 2023?

• $500 million

• $500 billion

• $1 trillion

• $10 trillion