The Behavior of Credit Card Interest Rates During the Decline in Other Interest-Rate Markets‪.‬

INTRODUCTION Although some consider 1949 to be the approximate beginning of the modern credit-card era (Brooker, 2004), the genesis of this powerful social phenomenon certainly goes back at least to the early 1900s. In 1914, for example, Western Union was using metal cards to allow its best customers to defer payments, and the cards became known as "Metal Money" (ETI, 2003). Prior to World War II it was fairly common for "department stores, communication companies, travel and delivery companies, and oil companies" (ETI, 2003) to issue credit cards to encourage and facilitate the purchases of their own products. But generally the cards were for "local purchases" at a single location and rarely used for the products of other companies.