Dan: Hello, I’m Dan Walker Smith and this is 6 Minute English from the BBC.
Today I’m joined by Kate. Hi Kate.
Kate: Hi Dan.
Dan: Now Kate, today we're talking about credit cards. So could you please tell me
what those are?
Kate: Sure. Well, credit cards are the plastic cards we use instead of money. You
can use credit cards to pay for items in shops or to take out cash; that is money
in its physical form, such as coins or notes.
Dan: So this week's question for you Kate is: In what year was the first ever credit
card introduced? Was it:
a) 1951
b) 1955
c) 1962
Kate: That's an interesting question. I had no idea they even went back as far as
1962. I thought they were much more recent than that. So in that case I'm
going to go for c, 1962.
Dan: OK, we'll see if you're right at the end of the programme.
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Kate: Now one of the obvious advantages of using a credit card is that it's often more
convenient than carrying cash. If something's convenient it means it's easier
generally or more suitable.
Dan: As you're not using actual money, some people say that credit cards can
encourage you to spend more than you can really afford, and you could fall
into debt. Could you explain what that means Kate?
Kate: Of course. Well the word debt, spelt D-E-B-T, is when you owe money to
someone else.
And unfortunately credit cards often mean that people build up an awful lot of
debt. So they're often not a terribly good idea. Have you ever had a credit card
Dan?
Dan: I have what they call a debit card, so I never accumulate money. I just pay off
what I already have, and I'm never in debt to anyone.
Kate: Well that's very sensible. I think credit cards can be a very good idea if you're
travelling or if you're abroad, and you're a bit worried about not being able to
get money out of the cash machine. But then unfortunately by the time you get
back to your own country you've run up lots of debt on your credit card, which
you have to pay off.
Dan: That's the thing; they're good for emergencies, but maybe you don't want to use
them for everyday life.
OK, let's listen to the British journalist Mark Flint, as he explains why credit
cards became so popular.
Kate: You'll hear the expression that credit cards were 'catching on'. To catch on in
this context means to become popular.
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Dan: And listen out for the word convenience, which, means that the people found
the cards convenient. As we heard before, if something's convenient it can
save you time and effort.
So if credit cards were popular with bank customers because of their
convenience, why were they so popular with the banks?
Extract 1
By the early 70s the credit card was catching on quickly. Consumers liked the
convenience and banks liked the profits.
Kate: Aha, so while the customers liked the convenience of a bank card, the banks
liked the profit, unsurprisingly. The profit is the amount of money that they
were making.
Dan: Banks make profit from credit cards by charging interest each month on the
unpaid debts.
Kate: And the word interest here is the term we use for a fixed fee that you pay
when you borrow money. It's usually a percentage of the total amount. And
debt, remember, is when you owe someone money.
OK, so let's have a listen to the next extract. The speaker talks about cash
machines. These are machines where you can take out money – or cash –
using your credit card. They're also called ATMs, which stands for
Automated Teller Machine.
Dan: Can you tell me when the world's first cash machine was installed?
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Extract 2
People were slowly getting used to plastic money, which would eventually be crucial to
another banking revolution: cash machines. The world's first ATM was installed in a
Barclay's branch in London in 1967, but it was quite a complex transaction.
Kate: Right, so the first ATM in the world was installed in 1967. It was opened at a
branch of Barclay's Bank in London. Here branch means a division of a
larger organisation. So the branches of a bank are smaller divisions of the
whole company.
Dan: The speaker also used an interesting term: plastic money. Of course, he
doesn't mean that the money itself is plastic, but that you're using a plastic card
instead of actual cash.
Kate: And we also heard the word crucial. Crucial here means something vital or
important. So when the speaker says cash machines were crucial to the
banking revolution, he means that they were very important to the development
of how we handle our money.
Dan: OK, we’re almost out of time, so let’s go over some of the vocabulary we’ve
come across today:
credit card
cash
convenient
debt
to catch on
profit
interest
cash machine
ATM
branch
crucial
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Dan: And let's go back to today's question: In what year Kate was the first ever
credit card introduced?
Kate: And I made a complete guess, because I thought the 50s were a bit too early to
have credit cards. So I went for 1962.
Dan: And for the first time in a number of weeks Kate, you're wrong.
Kate: Oh dear.
Dan: In fact, credit cards were introduced in 1951.
Kate: Gosh, I find that really surprising. I had no idea that they had credit cards that
early on, in the early 50s.
Dan: Well actually, the story goes that in 1949 Frank McNamara, who was head of
the Hamilton Credit Corporation, was having supper with his lawyer and a
friend in a New York restaurant.
And at the end of the meal he realised that he'd forgotten his wallet; he couldn't
pay for the meal, so he had to ring his wife to bring him some money.
Kate: Poor old wife!
Dan: So he was so embarrassed by this that he decided, with his fellow diners, to set
up the Diners' Club credit card, so that you could pay for meals without
needing any money.
Kate: Ah, so that was the first credit card.
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Dan: Well if the story's true. I'm not entirely certain whether there's any truth to it
entirely, but it's a nice story.
Kate: It is a nice story, and it's interesting just to see how the idea of the credit card
first emerged.
Dan: So from all of us here at BBC Learning English, thanks so much indeed for
listening, and goodbye!
Kate: Goodbye!
