America's love for plastic money has grown over the years. Total consumer debt in the US stands at more than $2.4 trillion.Total US consumer revolving debt is over $900 billion. Fifty-one percent of the US population has at least two credit cards, with one in ten consumers carrying more than ten credit cards in their wallets. There has been a tremendous increase in the number of credit card holders in the recent past. This is because many cards now offer points which can be accumulated and used to pay for merchandise or airline tickets.
The current economic slowdown does not seem to have had any significant adverse impact on the credit card industry. MasterCard forecast Thursday, that its revenue growth in 2008 will be in double digits. It also raised its long term profit outlook significantly. It now expects average annual net income growth of 20% to 30% through 2011, compared with earlier estimates of 15% to 20%.
Credit cards were first issued in the US in the 1920's, when individual firms, such as hotel chains and oil companies began issuing them to customers. The inventor of the first bank issued credit card was John Biggins of the Flatbush National Bank of Brooklyn in New York. In 1950 the Diners Club issued their credit card in the US which was intended to pay restaurant bills. American Express and Bank of America issued their credit cards in 1958.
These cards were an overnight success. Initially credit cards were targeted at traveling salesmen for use on the road.Over the years credit cards have evolved into a form of credit from a device of convenience. One in six families with credit cards pays only the minimum due every month, and almost 37% users carry more than $10,000 of debt. Deregulation of interest rates has allowed very high rates of interest to be charged. Courts also lifted restrictions on the amount of late fees a credit card company could charge. Interestingly, both Visa and MasterCard were started as non-profit organizations.