6 Things You Didn’t Know About Credit Cards
In today’s society, credit cards may seem like a common occurrence. But how much do we really know about them? Let’s talk about six different things you may not know about credit cards.
1. The creator of the first credit card believed credit cards to be a fad.
Frank McNamara was the creator of the first credit card. In 1950, he founded the Diner’s Club Card, the first card able to be used in multiple locations. This card could be used in 28 different restaurants and two hotels in New York. The popularity of the card grew substantially in the first year, with over 10,000 members.
2. The average US Household credit card debt in 2019 was $9,096.
These averages vary from age and income percentile. However, the median average is approximately $9,096 per household in credit card debt. A couple of factors do contribute to this. The first is the average number of credit cards a person owns: 3. Another factor is the percentage of adults who use credit cards – 83% of adults use at least one credit card. The total revolving debt in the U.S. is approximately $1.04 trillion, which is up from $857 billion in 2013.
3. Credit cards do not have an expiration date.
Although there is a printed expiration date on your credit card, it does not actually expire. You can continue to use the card after the noted expiration. The expiration date is used for non-physical purchases. For example, you must enter the expiration date in online purchases, and give it in phone purchases. This is to verify ownership of the card and to prevent fraud.
4. Standard credit card rates are illegal in most states.
From state to state, there are limits on how much interest a financial institution can charge. For instance, in Arizona, the legal rate is 10%; in Delaware, the legal rate is 5% above the Federal Reserve rate; in Hawaii, the legal rate of interest is 10%.
However, the 1978 Supreme Court ruling determined national banks are not accountable to state usury laws. This is why most credits are allowed to charge rates above 15%.
5. You have a say over credit rate increases.
In May 2009, Congress signed the Credit Card Accountability, Responsibility, and Disclosure Act, commonly known as the CARD act. This means you have a right to refuse to pay a higher interest rate. If your bank discloses to you a rate increase, you have a right to decline it. Simply call, and request nicely, and they may be willing to return to the previous rate. A more likely scenario, however, is the bank will refuse and lower your credit card limit, increase your payments, or close the card altogether.
The act also prohibits marketing to young consumers, including promotions on college campuses. This act implemented the disclosure of credit card payoff times on each monthly bill as well.
6. The first digit of your card is an identifying number.
According to a 2006 article on How Stuff Works, the first number of your credit card number can identify the type of card you have. For example, a 3 indicates a travel or entertainment card, such as American Express or Diner’s Club. A 4 is a Visa, 5 is for Mastercard and 6 is for Discover.
So there you have it! Six rarely known facts about credit cards. Which fact was most interesting to you? Or, which fact did you already know? Let us know in the comments below.
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