Sunday, May 3, 2009

bank Credit card

At the end of 1976, banks loans outstanding under credit cards totaled $11.3 billion which was a rise in such credit of $2.8 billion from the prior year. At the end of 1967, however only some $828 million of loans to consumers had been outstanding under credit-card plans. Bank credit, which was only 2.5 per cent of bank installment credit at the end of 1967, had risen to 5.8 per cent by the end of 1973. In this same six-year period, a similar dramatic growth occurred in the number of banks offering credit-card plans. Only 390 banks offered such plans at the end of 1967, but five years later by the end of 1972 some 8574 commercial banks were offering credit cards to their customers.
Although about 200 independent bank credit cards are operated mostly by small banks, there is a "big two" in the bank-credit-card field. Master Charge, issued by an association of banks called inter bank, is the largest bank-card operation with sales volume of $3.4 billion in 1970. National Bank American was second with $2.7 billion. In 1977, National bank americard changed the name of its card to visa. Nearly 95 per cent of all bank card credit outstanding is generated by these two systems.
Despite the widespread use to bank credit cards, many banks have difficulty in generating a profit from these owing to customer fraud, theft, default on account payments, mismanagement, collusion by merchants, and the high cost of processing records of transaction. As a result of these problem, banks issuing credit cards suffered some losses in the early 1970 's.

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