PIECES OF PLASTIC - BACKBONE OF AMERICA by Pam North It's time to pay the piper - all that Christmas shopping is now being translated into credit card bills. If you're feeling that you may have overspent a bit, it probably wasn't just holiday madness that got you there; statistics have shown that consumers on an average spend 23% more when they pay with credit cards instead of cash, so naturally merchants love them. While credit cards are now interwoven with the fabric of everyday life, they are a comparatively recent invention, but credit itself goes way back. The word credit comes from the Latin word for trust, and credit was first used in Assyria, Babylon and Egypt 3,000 years ago. The bill of exchange (the forerunner of banknotes) was established in the 14th century; debts were settled by one-third cash and two-thirds bill of exchange. Paper money followed in the 17th century. In 1730, the first advertisement for credit was placed by Christopher Thornton, who offered furniture that could be paid off weekly. From the 18th century until the early part of the 20th, talleymen sold clothes in return for small weekly payments. They kept a record or tally on a wooden stick of what people had bought; one side of the stick was marked with notches to represent the amount of debt, and the other side was a record of payments. In the 1920s, another "buy now, pay later" system was introduced in the United States. A small cardboard or metal plate was issued to the best customers of gasoline companies, department stores and major hotels, allowing those customers to use the credit card instead of cash and pay the bill at the end of the month. The card could only be used in the establishment that issued it. In 1950,a businessman named Frank McNamara found himself without cash to pay for a meal he had just eaten in a posh New York restaurant. Embarrassed by the fact that he had to have his wife drive across town to bring him the money, McNamara conceived the idea of a diners' card. In 1951 his Diners' Club issued the first credit card to 200 customers who could use it at 27 New York restaurants. (The Diners Club card eventually was the first credit card to be accepted by an airline and the first to be accepted in the Soviet Union and the People's Republic of China). The age of the credit card as we know it had begun. American Express launched a card of their own. Bank of America followed the trend and expanded it, issuing the BankAmericard (now Visa), the first bank credit card, in 1958. They were first promoted to traveling salesmen (more common in that era) for use on the road. By the early 1960s, more companies offered credit cards, advertising them more as a time-saving device than as a form of credit. In 1966, five Chicago banks banded together and mass-mailed five million active credit cards to people who hadn't applied for them. The banks had not exercised enough care in compiling their mailing lists, resulting in major errors. Cards were sent to babies and dead people; some families received as many as fifteen cards. A dachshund named Alice was sent four cards, one of which promised that she would be welcomed as a preferred customer in many of Chicago's finest restaurants. Such practices, along with the huge success of credit cards, demanded that controls be put in place, and by the mid-1970s Congress was forced to step in to regulate the credit card industry. Magnetic stripes were first used by the London Transit Authority in the 1960s, and the establishment in 1970 of standards for the magnetic strip finally made the credit card part of the computer age. Credit cards - whether friend or foe, whether you love them or hate them - they're apparently here to stay until something better comes along. Caption for image: Credit cards have become an integral part of life.