By Lubna Abdel-Aziz "Neither a borrower, nor a lender be" Shakespeare (1564 -- 1616), may have been very good advice in the 16th and 17th centuries. How does it hold in this high-tech industrious rat-race of the third millennium? Swamped with irresistible temptations of every complexion, denomination and persuasion, we reach for one of our several credit cards for aid and assistance. Our credit card graciously obliges. How else could we have gone through the holiday expenses without its magnanimous largesse! Oh the nobility, the mercy, the joy of a credit card. It bought all the toys for the children, paid for all the dinners, flowers, gifts, parties, decorations; even the new pieces of furniture, the long needed pots and pans, and the must-have dress for the party. How about that recent trip? Who paid for the airline tickets, hotel reservations, exotic meals, extravagant purchases? That small, silent, sterling, piece of plastic, no bigger than a child's hand. Like the genie out of the bottle, it grants your every wish and command anywhere in the world in exchange for the simple signature of the lucky owner. There will of course be a time of reckoning, but even that seems replete with compassion and understanding. Your bill comes once a month and you are requested to pay only a small percentage of the total amount, as well as a little interest on the unpaid part. How ridiculously generous, how kind and understanding, how benevolent! What more can you ask of a plastic card? No friend or parent would do for you as much! How did mankind survive before the conception of the credit card? We travelled, we celebrated holidays, we made purchases, we partied, we entertained, and we exchanged gifts. We certainly lived and did well without credit cards, but what a boon their presence affords. What genius invented the credit card rendering life so much more comfortable, facile and carefree? A credit card is a system of payment named after a small plastic card issued to users of the system. The consumer is then allowed to revolve his or her balance at the cost of having interest charged. There are hundreds of credit cards of the same specified standard, shape and size, of which we are so familiar with. Based on the ancient system of money-lending with interest, a credit card charges interest, previously agreed upon, only on the amount owed. You can pay a small percentage of the whole amount upon receipt of a monthly bill. Is this not as good as it gets, if not better? Is this not progress at its zenith in our modern world? The idea was first expressed in 1887 by Edward Bellamy, author of Looking Backward. In his book he describes a utopian system, using the explicit term "credit card" more than ten times. In the sequel titled Equality, the author continues to refer to the "credit card." In the 1920s a merchant credit card was used by a number of businesses in the US in order to sell fuel to a growing number of car owners. By 1938 several companies started to accept each other's cards. The concept of actually paying for purchased goods with a credit card was introduced some 50 years ago by Ralph Schneider and Frank X Macnamara who succeeded in consolidating multiple credit cards. The "Diners' Club" card was created partially through a merger with another card called "Sign and Dine." It was the first "general purpose" charge card, but it required the entire bill to be paid with each statement. Shortly thereafter the American Express card was issued followed by Carte Blanche. By 1958 Bank America created the "BankAmericard," which eventually evolved into the familiar 'Visa" system. A group of credit issuing banks established "Master Charge" which became "Master Card" in 1966. In the UK Barclays followed suit and the Barclays card was launched in Britain, the first credit card issued outside the US. Since Biblical times man was warned about the pitfalls of credit: "Be not made a beggar by banqueting upon borrowing" (Ecclesiastus) - hard advice to follow these days. How many means of credit are there? Let me count the ways! Or rather, let me not. There are countless variations on the basic concept of receiving credit. Credit is issued by banks and honoured by a network of financial institutions as well as organizations, branded credit cards, corporate user credit cards, store cards, etc. While they are used extensively in countries such as the US, Canada, UK, and now all of Europe, they have been slow to reach certain cultures that are much more cash oriented. In the last decade the little piece of plastic has become familiar globally, and but for a smattering of small islands and nations, your credit card is your major identity with respectable international sovereignty. Credit card usage has tripled since 2001 alone. College students and teenagers are targeted, enabling them to own and use a credit card, often without parental consent. The result has been increased balances, unwise usage, damaged credits and overpowering debts. This is the sad case, not only for the young and the restless, but also the old and the reckless. Banks too have suffered because of rampant fraud and creditors unable to meet their payments. Losses ranging from �15 million for some, up to $405 million in the UK have been reported. A 2006 documentary film Maxed Out: Hard Times: Easy Credit and the Era of Predatory Lenders, describes in detail the downfall of the credit card amongst all economic classes. If the card user would consider the cost of convenience and protection against the profits made by the industry from transaction fees and interest, and other hidden expenses, he would instantly drop his card. It is hard to fathom why not pay the cash if you have it? Often the cardholder does not carry the cash needed, not at the time of purchase, and very likely not at the time of payment. But that is not his main worry, for "tomorrow" as they say, "is another day." But the day of reckoning is sure to come -- tomorrow, and tomorrow and tomorrow. While there are advantages to presenting a card, signing your name on a magnetic strip, and running off with your newly acquired treasure, banks are getting richer while you are getting poorer. Fear it or cheer it, a credit card is convenient only in an emergency. It should definitely be avoided by thoughtless spendthrifts, for this convenient little plastic has been known to ruin lives, mental, personal and economic. Lucky is he who knows himself, his worth, his means, his failings, his credit card debts. Luckier still, is he who can avoid them entirely. Let us all be happy and live within our means, even if we have to borrow the money to do it with -- Artemus Ward (1834-1867)
