The Prepaid Credit Card and Its History

By admin

In the early 1900’s department stores and oil companies issued their own proprietary cards to people who they felt had access to money and would be able to pay them back. The first initial cards were accepted only by the company that issued them and in certain areas of the country. This was a good sound idea at the time as the creditors wanted to create customer loyalty while improving customer service. The prepaid credit came about with the coal mining companies to help pay their employee’s and keep the mines running until they actually got paid for the coal that was being mined.

It seems that many coal mining camps had company stores that were owned by the owners of the coal mines permitting their employee’s to buy the things that they needed. The owners of these stores kept them furnished with just about everything a person would need but their items could only be purchased by the use of company script. The coin was issued by the owners of the coal mining camp in order to be able to keep the miners making purchases at their own stores.

The owners of the mines and the stores usually had a good credit record and could get the much needed supplies on credit themselves and then when they sold the mined coal they were able to pay their creditors. The coal miners were not actually getting credit but were being paid in advance to help them to buy the necessitates of life. They were using prepaid cash because it was their hard earned money being paid to them in the form of script issued by the owners of the mines. This was a raw version of the prepaid card only problem the miners were paying about three times the amount for their goods than regular folks would pay when shopping outside of the camps. Today a prepaid credit card works the same as cash with no extra fees attached.