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4-Traders Homepage  >  Equities  >  London Stock Exchange  >  Barclays PLC    BARC   GB0031348658

Delayed Quote. Delayed  - 06/29 05:35:22 pm
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Put it on the plastic: Barclaycard, the UK's first credit card, turns 50

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06/29/2016 | 11:08pm CEST

Those left thoroughly disheartened by the week in politics and Monday’s Euro 2016 football disaster have been invited to reflect back on a happier time, when the Beatles were at No 1 in the charts with Paperback Writer, and England were about to lift the World Cup for the first (perhaps only) occasion. For it was 50 years ago on Wednesday 29 June 1966 that Barclays launched Britain’s first credit card.

Barclaycard kickstarted a revolution in the way we manage and spend our money, and played a key role in creating Britain’s £1.5tn personal debt mountain.

The card was “born” in a derelict shoe and boot factory in Northampton that had been converted into Barclaycard’s HQ. At that time cash was the most popular form of payment, and the idea of paying by plastic was completely alien to most people, some of whom took the view that credit cards were an undesirable American import. Barclaycard was based on Bank of America’s BankAmericard, launched in 1958. There was also a widely held view that the credit card was an inflationary system that encouraged people to spend money they did not have.

However, the banking group had some weapons up its sleeve. In order to generate widespread awareness of the launch it sent out 1m credit cards to Barclays customers – a marketing method the card company freely admits would be “absolutely unthinkable” today.

Then there were the mini-dress-wearing Barclaycard girls whose job was “to help educate and change people’s minds”.

As a spokesman explained: “Fifty years ago there wasn’t any specific credit regulation to govern how we went about business, so we had a lot more freedom in how we marketed the products.”

Related: UK borrowing rises at fastest rate in more than a decade

From the outset, Barclaycard made enthusiastic use of various advertising methods. In 1968, a 60-second cinema advert, Travelling Light, featured a young woman out shopping in a bikini with a Barclaycard tucked into the bottom half of her swimsuit. (“Every second is worth watching. You will see Barclaycard in action, and we mean action!” promised the flyer for the ad.) The company’s TV adverts included a series of spoof spy commercials starring Rowan Atkinson in the 1980s and 90s.

The arrival on the scene in late 1972 of the Access credit card brand meant that at last Barclaycard had some serious competitition. Nevertheless, it racked up its 2 millionth cardholder in early 1973. Today it has 10.5 million UK customers, which means it accounts for a sizeable chunk of the 59m credit cards in circulation.

While for millions of people credit cards provide a cost-effective way to borrow,they have left many nursing expensive long-term debts. The debt charity StepChange said credit cards were now the most common type of debt seen by its advisers. “The average credit card debt we see is now at £8,403, about half our clients’ average annual take-home pay, and there is a clear need for change,” said the charity, which provides free and independent debt advice.

Bank of England figures show net borrowing on credit cards rose by £418m during May, and outstanding debt on cards is now £1.3bn more than at the beginning of 2016. The data shows that consumers’ appetite for borrowing on plastic has picked up markedly since the months after the 2008 financial crisis.

Copyright © 2016 theguardian.com. All rights reserved., source Guardian Online

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