The idea for credit cards first came about in 1887 in the book Looking Backward, written by Edward Bellamy where he used the term 'Credit Card' many times. In 1914, Western Union had implemented charge cards which it issued to some of its better customers.
Here's some credit card trivia:
What entrepreneurs used credit cards to finance their business (source: Wikipedia)?
Larry Page and Sergey Brin of Google
Robert Townsend filmmaker
Kevin Smith director
Richard Hatch producer
Bruce Kovner hedge fund manager
Spike Lee director, producer, writer, and actor
The following is a list of some credit card companies that you might want to consider when making your next purchase:
Morgan Stanley (MS) just spun off its Discover Card (DFS) business, which it had owned for several years. The Discover Card was originally developed by Sears. It has a P/E of 17, and according to its CEO, David Nelms, the company has been growing at over 15% per year.
American Express (AXP), is the financial conglomerate that offers the famous American Express card, travellers checks, gift cards, gift checks, prepaid cards and merchant services. It also offers banking, investment and travel services. It has a P/E of 19.7, a PEG of 1.44, and it yields about 1%.
MasterCard (MA) , just went public in May, 2006. Its card brands include MasterCard, MasterCard Electronic, Cirrus, and Maestro. It has a very high P/E of 160, a PEG of 2.01, and a small yield of 0.4%.
Barclays (BCS) is the British financial services company, which offers banking services, investment banking, and credit cards, primarily the Barclaycard. It has a P/E of 10, and a yield of 5.1%. It has been paying dividends twice a year, for 20 years.
Citicorp (C), owns Diners Club, which was the first independent credit card company in the world. It was founded in 1950. The Diners Club trademark, was acquired by Citibank, a division of Citicorp, in 1981. In 2004, the company set up an alliance with MasterCard. Citibank also owns Carte Blanche, which issues the Diners Club Carte Blanche Card. It has a P/E of 12.4, a PEG of 1.15, and a yield of 4.2%.
For your information, VISA plans on going public next year.
Disclosure: The author owns MS and DFS.
