It some ways the modern debit card takes its place (except for the issue of rewards and advantage of cash back, I rarely pay ATM fees).

In the past, the charge cards were payment deferred to the end of the month managed by the store itself (probably hiring a bank or accounting firm to do the work although in store billing departments were quite common at the department store level). It was the successor to going to the local general store and because they knew you, you could ask them to put it on the bill (presumably until payday). With large cities and department stores this was unmanageable. The card (usually metal with embossed name and address and notches to enable at each store) was a point of reference that meant the clerk at the register didn’t need to know you or make any decision on allowing it. If your purchase were expensive, she would probably call the store’s billing department to authorize the charge.

I said that card was not usable in multiple cities. That was part of the notches in the card. Sometimes the system wouldn’t quite work as planned. My mother got a card in Philadelphia and used it at some stores there. She then went to a New York suburb for half a year and had no trouble. Finally we moved to the suburbs of Baltimore. It worked well for quite a while. Apparently most clerks made the notches fit. One day, an alert clerk noticed a discrepancy and my mother had to go to the financial department to be issued a new card good in Baltimore (and visit the billing department of the other three department stores to get it notched for them before she could use it). Since she had paid her bills ontime, it took only a few minutes at a service desk to get this accomplished in each store. The card had been notched in Baltimore for the department stores there but was fundamentally a Philadelphia card. It means that if you shopped at Gimbles in Philadelphia, you needed a separate physical plate for Gimbles in New York. However you could share the plate with Wannemakers in Philadelphia and the New York Gimbles card could be notched for Macys also.

It was a nice idea that worked well until travel became big. That’s where Diner’s card was an innovator and was useful a lot further away. Then came the Master Card and Visa card. Now you could have one card (or more if you chose) and shop anywhere that accepted it. They didn’t need to know you and you didn’t need to be local.

But just like store credit these old plates were pay at the end of the month and you could lose the card for not doing so.

As you can imagine, these charga-plates (as one system was known) were only for the financially ’sound’ people and were a middle class and above feature. Credit cards open this area to those who would not have qualified usually with the expense of higher fees.

Debit cards typically don’t have rewards programs that are comparable to credit cards. But that is changing soon: I work at PerkStreet Financial, and we are launching the industry’s first free checking account with a debit card that pays rewards like a credit card – or even better.