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Travis McGrath applies for two or three credit cards a month (if you apply more often, you get rejected, he says). The 56-year-old computer programmer makes sure his sister signs up for some cards and forwards them to him, too. And it's not unusual for McGrath to find a credit card or two in his Christmas stocking. "This is not necessarily a surprise, but it's always welcome," he chuckles.
One of several hundred credit-card collectors in the country, McGrath spends many of his weekends rummaging through antique shops in the 100-mile radius of his Albany, Ore., home looking for credit cards for sale. His collection, which he estimates to be worth about $5,000, consists of about 6,000 cards collected over eight years, all carefully stuffed into plastic pockets and hidden away in three-ring binders. The binders are, in turn, stored in cardboard boxes. Every inch the collecting enthusiast, McGrath wants to make sure his cards won't get scratched -- new-looking, unsigned cards are worth more.
McGrath's collection is small compared to the heavyweights' hoards. The largest collection in the nation, he estimates, boasts 20,000 cards. But most dealers acknowledge they really have no idea if a demand for the cards exists (they typically sell for between $1 to $20 among collectors). Though some speculate that older and more rare cards could be worth several hundred dollars, collectors say just laying their hands on the cards is the hobby's main challenge and attraction. "There's some sense of adventure in trying to find what not everybody has," McGrath explains.
Deep down, most collectors believe that the hobby will make them rich some day. The "animal magnetism" of plastic is bound to attract the masses eventually, the collectors say.
PLASTIC ARTS. That prospect drove Jerry Ballard, president of an industrial-distribution company in Virginia, to start collecting in 1972. Back then, Ballard, now 57, says he and his friend Mike went out to lunch and waxed nostalgic, thinking of the Batman comic books they had thrown away long ago -- which could have made them a small fortune if they had hung onto the books. "We need to figure out a trend," Ballard says. So he spent the next few days thinking about what items he could collect that could make him rich. "A few days later, it hits me," he says, sounding as excited today as he must have been back then. "Credit cards! Mike thought I had lost my marbles."
Today, Ballard says he's the fifth-largest collector in the country. A while back, he counted all the active credit on his cards and calculated that he had more than $1 million available on plastic. But when card collectors -- about 120 of them are members of the American Credit Card Collectors Society -- get together for their yearly convention (held this year in Indianapolis in October), they often forget to bring working credit cards and have to scramble for cash, Ballard jokes. After all, you might damage the specimen. This bunch doesn't collect cards to pay bills.
To many of these collectors, credit cards are art -- and you wouldn't bring a Van Gogh into a restaurant to show your friends while eating greasy fries, would you? To the enthusiasts, the cards are alluring because of the variety of their designs: They can feature outdoor scenes, sports figures, logos, or pets. "The image is frequently attractive," says Tom Bower, deputy registrar at the Smithsonian's National Museum of American History. "And collecting is a way of documenting everyday life that becomes history."
The museum, which owns about 300 credit cards as well as an archive of books and articles on the history of credit cards, doesn't have any of its cards on display due to lack of space. But the cards are "such a part of our daily lives" that they're bound to be shown when the museum creates exhibits on contemporary culture, he muses.
ANTIQUES. Although other forms of credit certificates -- such as letters of credit -- existed even before the 19th century, using plastic as currency is, of course, a fairly recent phenomenon. In money's 2,500-year history, coins changed shape and form, but people usually preferred using gold. That changed drastically after World War II, when the public's trust switched from money backed by gold to paper money, Bower says. Early forms of credit cards started popping up around the 1950s.
Nowadays, an average U.S. resident receives 17 pre-approved credit applications a year, according to Consumer Credit & Budget Counseling Inc. (CSBC), a nonprofit consumer-education agency based in New Jersey. And there's a wide variety to choose from. Discover Financial Services has been offering credit cards since 1986 and now has 50 million of them floating around. The company offers about 45 different designs.
First USA, the largest Visa issuer in the world, with more than 55 million cards, offers cards to more than 2,000 organizations, each of which could have up to a dozen designs. The Web has made the cards more available, too. On eBay's online auction site in late August, three credit cards -- one from the 1930s and two from the 1940s, with calendars on the back -- were being floated for $2.50 a piece. And three old gas-company credit cards from Rocket Oil Co. & Richfield were being offered at $6 total.
"PRACTICALLY FREE." But those are historic cards. Regular cards cost no more than the time it takes to fill out the application. To credit-card companies, however, application processing, credit checks, and card issuance could bring the cost of the card up to $100, says Tom Graves, CSBC's senior counselor. But the companies, which charge up to 21% a year interest, don't worry about losing cards to collectors. "We're going to run the business assuming that people are using [their] credit cards," says Jeff Unkle, First USA's first vice-president for corporate affairs.
Pat Petersen, a 49-year-old salesman living in California, got into the hobby in 1985 because it's "practically free," he says. Petersen also collects lottery scratch-off tickets in addition to his modest collection of about 600 credit cards, he says. He doesn't trade cards though, for security reasons -- many of his items are active accounts in the names of family and friends. Even though an account may (and, as Peterson acknowledges, should) be closed before being added to a collection, the name and account number are still on the card -- and who knows what they could be used for, he says. When posting samples of his cards on his Web site, Petersen makes sure neither the name nor the account number is visible.
Security should be a concern, says Graves of CSBC. For many student cards, the account number is the same as the applicant's social-security number. Thus, someone who got a credit card through an exchange could use the information on the card to get a credit report and to try to hack into the former owner's accounts. The hobby also could have a negative impact on the collector's credit report. Every time a person applies for a card, the attempt is registered in one of the report's sections, Graves says. The section details all of the inquiries into a person's credit history for two years, and numerous entries could be a red flag to credit officers.
In addition, the process of collecting unused cards can hinder a person's credit eligibility for a huge purchase, such as a home, since many banks and mortgage companies factor exposure to debt in calculating an applicant's ability to make future payments.
McGrath admits that security "is one of the things that keeps people from the hobby." So like most collectors, he keeps a strong magnet at home to demagnetize his cards' magnetic strip, rendering them unusable, and he makes sure he cancels his accounts before trading. But then again, credit-card fraud with these collectors is probably not that likely. With so few of them, it shouldn't be too difficult to trace a perpetrator down. And who knows? Someday the risk may pay off -- and that card with a laminated picture of somebody's pet may be worth a fortune.
By Olga Kharif in Washington Edited by Beth Belton
Copyright 2000, by The McGraw-Hill Companies Inc. All rights reserved.
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