The idea of credit wasn't born in America in the 20th century. It dates back to the ancient days of the Assyrians, Babylonians and Egyptians. The first advertisement for credit was placed in 1730, stating that furniture could be bought and paid for in weekly credit installments. This occurred long before credit markets sprang to life.

From then until the early part of the 20th century, tallymen would offer clothes in exchange for a weekly payment. These tallymen kept a record of what people had bought on the side of a wooden stick, which was marked with notches to represent the debt and the payment.

In 1958, American Express and Diners Club launched their plastic credit cards, but it wasn't until the 1970s when a magnetic strip was added to the back of the cards that credit became popular. This effectively launched the history of consumer credit.

BankAmericard was the next to grow and succeed and other banks saw the potential profit in credit cards. More and more companies began to enter the credit markets. The key to success was to have plenty of customers, so companies began to solicit for business and made it easy to secure credit.

More cards were handed out and several problems arose. There was plenty of credit card fraud, people either stealing credit cards and using them illegally, or piling up bills and refusing to pay. There were other problems with people stealing the cards when they were mailed, as well as people receiving cards they never requested. All this led to the Fair Credit Billing Act of 1974, which was designed to protect the consumer.

Credit has become a problem in today's society. Too many people have used the credit cards to live above their means, expecting to pay them off but never getting around to it. The credit problem has compounded the nation's economic problems, as people have lost money in the homes and lost jobs, there has been little left for credit card payments. This has put an extra burden on the banks, who have had enough trouble dealing with toxic assets. The credit problem isn't one that is likely to be resolved any time soon.