Minds On
What do you know about credit cards?
Brainstorm and record (using an audio recording, paper, or the computer) anything you already know about credit cards and using credit cards as payment.
In this learning activity, you will be learning about credit cards as an alternative method to cash payments.
Action
Credit cards
A credit card often looks just like a bank card, but it’s not. While both cards are plastic, when the credit card has a balance, the customer is taking out a loan until the balance is paid.
If the customer does not pay their credit card bill on time, the customer has to pay the bank a penalty or late fee. This penalty is called interest. Interest means that the customer will have to pay even more than is on the bill each month until the full balance is paid.
You may already recognize some of the well-known credit card companies. The most well-known companies in Canada are:
- Visa
- Mastercard
- American Express
What are the features of a credit card?
The front of a credit card has the following information:
- cardholder name
- a unique multi-digit account number
- expiry date in terms of month and year
- the name of the financial institution or credit card company (Visa, Master Card, American Express)
The back of a credit card has the following information:
- a magnetic stripe
- a blank line for the card holder’s signature
- another security feature (a security number that is either 3- or 4- digits)
Store credit cards
Some larger companies and stores might offer credit cards. This means that sometimes people can get discounts and earn points for using that card to buy things they may want from that store.
Prepaid credit cards
The credit card companies of Visa and Mastercard have created Prepaid Credit Cards, and anyone can use these. This means that someone has already paid the amount of the credit card and whoever receives it can use it, like a gift card.
Student Success
Think-Pair-Share
Explore the positives and negatives of using credit cards. Record your thoughts in the following fillable organizer Positives and Negatives of Credit Cards. You can also complete this activity in your notebook or use another method of your choice.
| Positive Reasons for Using Credit Cards | Negative Reasons for Using Credit Cards |
|---|---|
|
Example: Missed or late credit card payments result in a penalty charge. |
Press the ‘Activity’ button to access Positives and Negatives of Credit Cards.
Note to teachers: See your teacher guide for collaboration tools, ideas and suggestions.
Consolidation
Think and respond
Explore the following quote. Find an interesting way to respond to the quote. Record your response in a notebook or another method of your choice.
Quote
“Carrying cash to use is better than using a credit card because you can easily overspend using a credit card. Never use a credit card!”
The history of credit
Create a timeline for the brief history of credit and credit cards.
In ancient Mesopotamia during the reign of King Hammurabi, the sixth King of Babylon (current-day Iraq), merchants would give farmers seeds to plant and grow as the loan, and then get paid back in the form of harvests.
The first known recorded system of rules for credit, loans, and repayment is found etched in a 2 1/4 m tall black stone pillar called the Code of Hammurabi, using the cuneiform script in the Akkadian language.
In India, during the Maurya Dynasty, an agreement of a credit/loan was written on a bill that shared the amount of money to be paid at a later date. A letter of credit was given between merchants to help each other do business.
Around the 1700s, lending became a positive way of doing business again. It was a good way for those with money to lend what they had to others who needed to borrow to do business.
In the late 1800s, small business started allowing customers to pay using credit in the form of coins and paper. Hotels and department stores offered credit on paper to certain trusted and frequent customers.
In 1914, Western Union metal plates were given to chosen customers to allow them to make purchases based on credit.
In 1920, oil and hotel companies started offering metal plates and by 1928 a company called Farrington’s issued a metal credit card called the Charge a-Plate that had the customer’s name and address imprinted.
The following is an image of a Charge a Plate from the 1960s.
In 1946, in Brooklyn, New York, banker John Biggins and his bank offered his customers the “Charge-It” card.
Biggins invented the Charge-It card system where customers could use the card for a purchase, and the store would then get paid by Biggins’ bank. The customer would repay the bank.
The Charge-It card system gained popularity quickly through the 1950s.
American Express followed suit by 1958, and in 1959 they issued the first plastic credit card.
By 1966 VISA was formed, and in 1967 Mastercard was formed.
In the 1960s, the company IBM developed magnetic stripes to store airplane ticket information used at airports and by the 1970s, the magnetic stripe technology was on credit cards. The magnetic stripe technology allows for information to be stored and read by a magnetic stripe reader. This stripe was used for higher security at that time along with the card holder’s signature on the back.
In 1994, Europe released ATM and EMV cards (Europay-Mastercard-VISA) which are known today as chips, PINs or smart cards.
In 2007, chip credit and bank cards were introduced in Canada by Interac, Mastercard-Canada and VISA-Canada.
By 2012, Interac, the Canadian debit network, was only reading/accepting chip cards at ABMs. By 2015 retail stores would only accept chip cards.
Reflection
As you read through these descriptions, which sentence best describes how you are feeling about your understanding of this learning activity? Press the button that is beside this sentence.
I feel...
Now, record your ideas using a voice recorder, speech-to-text, or writing tool.