At the beginning of 2000, Kiplinger's Personal Finance Magazine asked its readers to name which modern financial change had the most effect on them personally. The vast majority named the invention of credit cards. These small plastic rectangles, which most businesses now accept in place of cash, have become an everyday feature of modern life. The cards allow shoppers to take a purchase home one day and pay for it later. Credit cards have brought convenience to those who use them. They have also changed the way people both spend and save money and have therefore brought enormous changes to the world economy.

Department stores first introduced the charge card in the 1920s, usually a small metal plate imprinted with the customer's name. These "charge plates" inspired loyalty to the store that issued them because they could only be used at that store. In 1950, a New York...