Most important things are invented by accident and one of them is a credit card. Imagine that you are having dinner in a restaurant and you realize that you don’t have money to pay for it. What are you going to do? Most people answers are that they are going to call their wives or husbands. But what if you don’t want your wife or husband to know that you are having dinner there or you can’t call them or don’t have someone to call? This scenario is the real story of Frank McNamara. Unfortunately, different resources have different endings but all of them agree that this was the moment when Frank McNamara had the idea of credit cards.
The story took place in New York in 1949 and was the beginning of an era. Some resources think that the story is a fake and it is thought up only for attracting attention. No matter if it was true or not this night was remembered as “the first supper”. One year letter Ralph Sneider and Frank McNamara opened a project Diner’s Club. The terms were $3 tax for membership and the opportunity to have a meal in 27 restaurants without paying the same day – sign now, pay later. Several months later they merged with another credit card business Dine and Sign in.
What was the feedback after the first year of credit card service?
Most business owners were not very keen on the idea, as you can imagine. But the total numbers shows that for one year people who get a credit card were 20,000. The second year this number became triple and expands to foreign markets as Cuba, Canada, and Europe. No long after that appears MasterCard and Visa. Today, we know more than 20 different credit card providers and these are only popular ones. For example, credit cards in Singapore are more used than cash and the number is rising every year. According to some studies in Singapore, credit cards are 60% of payments for 2016. Debit cards are increasing their numbers, too.
What is the reason behind rising credit card usage?
There are a lot of benefits. If you open a single website which offers different credit cards we will notice how many cash back and rebates exist. If you are about to get your first credit card in Singapore, there is a high possibility to gain some cash with it. Finty.com will give you $10 to $50 cash reward even if it is not your first credit card. The exact amount depends on the credit card type. Different banks offer different rebates for local shops, gas, Uber, TV or internet bills. Some credit cards give you the opportunity to collect points and to use them for discounts. Another very useful advantage is the opportunity for cash back when shopping in certain shops and restaurants. As you can notice, it is not all about spending money; it is for saving them too. Now, you know why credit cards are so popular method of payment in Singapore.
For example, cash payments are only 16% and e-wallet is 9%. Both of them are going to decrease in the future.
What is the downside of credit cards?
It is a different type of credit and you don’t have the money that you are spending. Yes, it is cool to pay for this gorgeous pair of shoes later but what if you cannot afford it? Regulations for credit cards in Singapore are constantly changing because people are always in debt and can’t cover it. There is a regulation that you can’t take a loan or credit card if your monthly payment is more than 60% of your salary. Otherwise, the government is taking care of people’s spending.