Innovations in credit card design

Credit cards are a part of our everyday life — industry data shows that nearly 80% of consumers prefer paying with a credit card versus cash¹. People are reaching for their credit cards more than any other form of payment, with usage up 33% in late 2022². This article will address where we’ve been, why we’re using them, and where we’re going with credit cards.

Where we've been

The credit card as we know it today was first dreamed up by Frank McNamara and his business partner Ralph Schneider, the founders of the “Diners Club” in 1949. McNamara was eating dinner in New York when he realized he had left his wallet at home. In lieu of washing dishes to pay off his tab, he signed a note saying he would come back the next day to pay. This little mishap gave him the idea for the first credit card, and the Diner’s Club started giving cardboard cards to members who could use them in restaurants that opted into the program. When the club first started, it only had 200 members — and people loved the idea so much that within two years, the club had grown to 42,000 members.

In the early 1960s, credit cards became like what we know them as today, with a magnetic stripe that was added to the back of the card by an IBM engineer named Forrest Parry — although, we should be giving a lot of the credit to his wife, Dorothea. Parry was creating cards for the government and had the idea of gluing a piece of magnetic tape to each plastic card, but the glue warped the tape and made it impossible to use. When Parry returned home from work, he found Dorothea ironing clothes. When he told her about his predicament with the cards, she suggested using the iron to melt the stripe onto the card instead. And what do you know, it worked!³ Those magnetic stripes enabled banks to encode information onto the tape secured to the back of the card. That stripe went on to be used on other items too, including gift cards, hotel keycards and security badges.

Where we’re going

Over the years, there have been more innovations in credit cards, one of the largest being the embedding of EMV chips (Europay, Mastercard and Visa). EMV cards have a small, square computer chip that appears on almost every debit and credit card and helps safeguard against fraud. The EMV chip was first introduced in the U.S. in 2011 and was designed to improve credit card security. They’re safer than just having a stripe, because the technology used in a chip card is constantly changing and updating, which makes it harder for hackers to get the card’s information. The EMV chip card is also encrypted, so it’s much harder to copy than the magnetic stripe. In fact, nearly half of the users in a recent study say that they use credit cards, because it gives them peace of mind that their information is secure.

Another change that has been coming to the world of credit cards is creating metal credit cards. While most are still made of plastic, these metal cards are more durable than plastic. Some cards may also have a notch cut out of them, called a “Touch Card,” similar to the Citizens Private Client™ World Elite Mastercard^® that we recently launched. The notch feature makes it easier to tell that card apart from others. This is a great feature for those who are blind or visually impaired, so when they go to reach for the card, they can identify it right away. It was first introduced by Mastercard in 2021, with the design officially being used on their cards in 2022.

Raja Rajamannar, chief marketing and communications officer at Mastercard, told NPR, "The Touch Card will provide a greater sense of security, inclusivity and independence to the 2.2 billion people around the world with visual impairments. For the visually impaired, identifying their payment cards is a real struggle. This tactile solution allows consumers to correctly orient the card and know which payment card they are using."⁴

Citizens is proud to be working with Mastercard to offer this innovative new credit card design.

While there have been changes to physical credit cards that are being implemented regularly, the way we pay with them is changing just as frequently. With Contactless credit card payments, you can simply tap your credit card on the payment system at the retailer you’re at (if they’re one of the 95% of merchants in the U.S. that can accept contactless payments) and automatically pay with your card. The technology is super safe and only works by moving the chip near the point of sale (POS) reader. Your card can also be stored in your digital wallet to make contactless payments through your phone. It’s stored with other things, like concert tickets, parking passes, boarding passes and more.

What's in store

Whether you’re renting a car, scoring concert tickets or buying something from your favorite boutique online, credit cards play a pivotal role in all our lives. They’ve come a long way since the 1950s, thanks to evolving technology advances and the new credit card designs and features that have been implemented over the years. Whether people want convenience or to just enjoy the rewards they can earn, credit cards are here to stay.