It is an interesting point to note that the term ‘credit card’ was first used in a novel – a novel structured around utopia. Looking Backward is a novel of great literary importance. Written by American Novelist, Edward Bellamy, in 1887, the novel tells the story of a young man born in late 19th century America, who falls asleep and wakes up a hundred and thirty years later to find his world completely changed. Like any other novel attempting to define the world in futuristic terms, this novel also lays claims to many erstwhile unheard of concepts. One such was the Credit card.

After finding mention in the novel, the first credit card first came into being in the 1920s. The earliest form of the card was the charge card – cards issued fro the sale or exchange of a single commodity such as fuel. Early Twentieth Century American users could not have imagined that the credit card would become the central fixture of monetary dealings in less than a hundred years.

The modern Credit Card is a plastic rectangle that one can use in lieu of cash. Today there are several types of credit cards, each performing specific functions. One such type is the Charge credit Card, which is very similar in function to the first variety of it used. Some people distinguish the credit card from the charge saying, claiming that they are not related. There is one essential difference between a credit card and a charge card. A charge card requires the user to pay back the money charged on the card, in full at one it does not provide one with the option of paying back the money charged on the card in installments. Credit Cards on the other hand, allow card holders to repay the sum borrowed on the card through an extended length of time. The interest is calculated for each additional month that the user wishes to prolong payment.

Credit cards are issued by Banks and Credit Card companies. The function of a credit card issued by a bank and one issued by a credit card company is the same. The only differences may relate to interest rates, scheme, policies etc. All credit card Companies do not offer the same packages. Each company, through its team of market researchers compounds a package that it believes will attract the most customers. In addition it has to also attempt to stay ahead of the competition. The offers made by a credit card Company are a sum total of all these considerations.

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