Credit card might have become a part and parcel of daily transaction. There is little to deny its existence as one of the integrals of modern urbanized existence. But for delving into its historical perspective, the idyllic novel of Edward Bellamy can come in for use. A leading socialist cum writer’s ‘Looking Backward’ testifies to the usage of the terminology. That’s because in the course of the entire novel, Bellamy uses the concept as many as eleven times.
Origin Of The Jargon
The novel unveils the reference to credit card. Written way back in 1887, it happens to be the first testament unveiling such a reference. But despite the commonality in terminology, the implication of usage in course of the novel differed from what things stand out today. As things stand today, the terminology of credit card has closer reference to borrowing rather than spending. But the novel testifies to the usage of credit card as an instrument of spending.
How The Concept Gradually Evolved
The commonly usable cards of credit have evolved and developed from the multifarious schemes of credit. The schemes and policies based on credit are nothing new. Moneylenders and merchants dealing in such policies have been playing a proactive part, ever since the inception of money as a means of transaction. Credit card reflects one of the significant developments in the realm of money based transaction. The United States of America happens to be the first nation to witness the usage of credit card. Way back in the twenties, it dictated the scheme of fuel transaction. The respective owners of automobiles were found making use of the credit card.
The Procedural Modalities
In this context, it will be worth delving into the fundamental modalities that govern the usage and operation of a credit card. First and foremost, there needs to be a valid authority for issuing such a card. Such cards have to be issued and sanctioned by a bank. Financial institutions responsible for sanctioning credits are similarly entitled for issuing the same. There are procedural details to go through, before you are entitled to its usage and application. The respective provider of credit generally takes note of your financial credibility before certifying you with the usage of a credit card. The card is sanctioned only after a thorough checkout and approval of your bank account.
The Principles Guiding Its Operation
At the end of the day, the issuer has to pull in the amount facilitated to you in form of credit. This makes it mandatory for banks and other financial institutions for cross checking your financial condition. The usage of a credit card works on the scheme of balance. When you are purchasing a goods or service with the help of a credit card, you are ultimately consenting to pay the provider- the source which has issued and validated the application of the same. Either you can pay on monthly basis or continue with the scheme of debt. With the failure to repay the money used as part of the credit based transaction, within the stipulated period of time, you put yourself into a debt prone situation with the obvious involvement of interest payment.