Credit Cards are a huge piece of Christmas shopping: according to a survey from CreditDonkey.com, some 37 percent of respondents use credit cards to finance their holiday shopping. Online retailing would hardly exist without credit (and debit) cards, since sending cash through the mail is risky and money orders are not always convenient. Christmas shopping, with CyberMonday and Black Friday, only boosts the incentive to use cards as plastic money. As of September 2013, American consumers carry some $846 billion in revolving credit, up from $1 billion in January 1968, according to the U.S. Federal Reserve.
How did this happen? One big factor was magnetic stripes, invented by IBM engineers in the late 1960s. The first recognizable charge cards date back to the 1930s, but they were metal plates stamped with the customer information and they were accepted only at certain stores. It wasn't until 1950 that the Diners Club Card made its debut, and the first real credit card - a revolving credit instrument accepted widely and issued by a third-party bank - was issued in 1958. But the cards were easy to forge. The magnetic stripe could hold data reliably on a plastic card, and by the late 1970s the technology was good enough that Visa and MasterCard adopted it.
Magnetic stripes made electronic point-of-sale terminals possible - no more taking a manual imprint and calling the bank to check that the card was good. A single swipe would do it. The easier, simpler approval of credit card transactions set the stage for a huge jump in the number of stores that would accept cards and the amount of money spent at Christmastime. In January of 1979 American consumers had about $45.5 billion in revolving credit. By mid-1984 that number doubled, and it doubled again by 1988.