Why credit is so important?
Credit (from the Latin verb credit, meaning “one believes”) is the trust which allows one party to provide money or resources to another party wherein the second party does not reimburse the first party immediately (thereby generating a debt) but promises either to repay or return those resources (or other materials of equal value) at a later date. In other words, credit is a method of making reciprocity formal, legally enforceable, and extensible to a large group of unrelated people.
The resources provided may be financial (e.g. granting a loan), or they may consist of goods or services (e.g. consumer credit). Credit encompasses any form of deferred payment. Credit is extended by a creditor, also known as a lender, to a debtor, also known as a borrower.
The term “credit” was first used in English in the 1520s. The term came “from Middle French crédit (15c.) “belief, trust,” from Italian credito, from Latin credited “a loan, thing entrusted to another,” from past participle of credere “to trust, entrust, believe”. The commercial meaning of “credit” “was the original one in English (creditor is [from] mid-15c.)” The derivative expression “credit union” was first used in 1881 in American English; the expression “credit rating” was first used in 1958.
Credit cards became most prominent during the 1900s. Larger companies began creating chains with other companies and used credit cards as a way to make payments to any of these companies. The companies charged the cardholder a certain annual fee and chose their billing methods while each participating company was charged a percentage of total billings. This led to the creation of credit cards on behalf of banks around the world. Some other first bank-issued credit cards include Bank of America’s Bank Americard in 1958 and the American Express Card also in 1958. These worked similarly to the company-issued credit cards; however, they expanded purchasing power to almost any service and they allowed a consumer to accumulate revolving credit. Revolving credit was a means to pay off a balance at a later date while incurring a finance charge for the balance.
Until the Equal Credit Opportunity Act in 1974, women in America were given credit cards under stricter terms, or not at all. It could be hard for a woman to buy a house without a male co-signer.  In the past, even when not explicitly barred from them, people of color were often unable to get credit to buy a house in white neighborhoods.
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