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Well, in the US at least, the credit card business got started as a way for traveling business-men to charge their expenses to a single card without having to shell out their own expense money up front. They would then submit the expense to their employer for reimbursement and (usually) get the money before the credit card bill arrived. I note that the early cards were actually charge cards -- they required payment in full at the end of the month! The charge card companies made their money by charging a fee to the merchants. Who, in turn, made out by attracting additional business -- relatively free-spending business, at that -- in the form of the traveling businessmen who were spending OPM (Other People's Money).
The "credit" part of credit cards arrived later, when banks and large retailers decided to get in on the game. Why, you may ask, would a charge card holder want a credit card instead? They probably wouldn't. But because the early charge-card companies were very selective about who could get cards, there were lots of folks who didn't qualify. The banks and large retailers were less selective, by comparison, because they expected to make money charging ridiculous interest rates if you didn't pay in full. In fact, they hoped their customers wouldn't pay in full at the end of the month!
I finally got a Visa card to go with my American Express charge card only when too many merchants switched to Visa/MC rather than taking Amex -- I had to have the other card or pay cash. And I rarely carry much cash.
Xenophon
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