Miami Valley Coin Club

The Origins of the Credit Card

In an era when currency was often unavailable (and few people were literate), the tally stick, a forerunner of today’s high-tech credit cards, became increasingly popular in Europe.

In this early version of financial record keeping, notches were made on a wooden stick to indicate the amount lent—and owed. The sticks were then split down the middle; the creditor kept one half and the debtor the other. When a payment was made, the sticks were paired up, and the payment was marked on the stick. The tally stick system also had another built-in benefit: It was nearly impossible to counterfeit, as the shape, size and grain of the wooden halves had to match up perfectly.

Tally sticks were used in much of Europe, but probably nowhere as extensively as in England. For more than 700 years, tally sticks were used to collect taxes from local citizens, until the system was finally abandoned in 1826. Eight years later, when the British parliament finally decided to get rid of the thousands of leftover tally sticks being kept in storage, they decided to burn them in an underground furnace that heated the House of Lords, resulting in a massive fire that destroyed most of the complex—the worst fire to hit London since the Great Fire of 1666.