Forms of credit have always been crucial in the world of business. You can look back to the glory days of the Roman Empire and find all sorts of contracts and arrangements that depend on some form of credit or deferred payment.

In the 19th century international travelers often relied on letters of credit drawn upon their hometown banks. A specified amount, what we would today call a line of credit, was listed and as the traveler obtained funds from banks or financial service providers in other countries, that original line was correspondingly reduced.

Widespread consumer use of credit cards is a relatively recent invention. Many business historians point to the creation of the Diners Club card in the 1950s as the first true 20th century credit card.

A New York City businessman by the name of Frank McNamara hosted a business dinner for colleagues one night at an upscale restaurant. Upon being presented with the bill, he realized that he did not have his wallet with him. To save face in the event of a similar embarrassment in the future, he began to think about alternatives to paying cash or writing a check.

In short order, he and his partner returned to the establishment and paid the bill using a cardboard chit. Before long, 26 other Manhattan restaurants had signed on and 20,000 cards were circulating by the end of the year. Eventually named the Diners Club Card, it become very popular in the business community, whose members used it for dining and travel expenses. This marked the birth of today's multibillion credit card industry.

Today banks all over the world issue credit cards to hundreds of millions of consumers. Essentially, each card is an unsecured line of personal credit ranging from perhaps a few hundred to tens of thousands of dollars, depending upon personal income, and other financial assets and obligations. Although the concept is simple, in actuality the complex financial, legal and other rules governing the use of these credit cards are a potential minefield for unwary consumers.

The big three credit cards currently used in the United States are Visa (about 270 million), MasterCard (about 171 million) and American Express (about 49 million). The average American holds five credit card or department store cards, with New Hampshire and New Jersey households leading the pack with an average of 10 cards. Worldwide, more than one billion Visa cards are in use.

The key reason credit card issuers are so fond of raising fees and finding new ones to impose is that they are a valuable source of revenue. Late payment penalty fees alone were estimated at more than $20 billion in the U.S. in 2009. This is pure profit and you can be confident this amount has increased since that calculation was made.

In 1958, the Bank of America began a credit card program that was initially limited to its customers in the state of California, and then decided in 1965 to expand it via licensing programs to banks in other states. The next year it was one of several banks that decided to create and develop a national credit card system that was called the InterBank Card Association.

A similar but competing second organization was also formed. One organization handles Visa credit cards for individual and businesses, and the other handles MasterCard accounts for the same markets. Both of these cards allow their holders to maintain outstanding balances over the life of the account.

Arriving late at the party was American Express, which for many years had a policy mandating that account balances be cleared at the end of each monthly cycle. Seeing the amount of money that could be made using the Visa and MasterCard models of allowing outstanding balances to be carried over if interest was added to the total, AmEx issued its first card of this type in 1987.

An even later arrival was the Discover Card, a credit card originally developed and owned by the Sears Roebuck retail empire, and introduced to the U.S. marketplace in 1986. This card has gone through several iterations since its introduction, but is still an active player in the credit card arena.