Our parents already had a credit card in socialism
Imagine a world where there was no Facebook, no cell phones, no commercial TVs, and even no web-based internet, so not only could we not compare Hungarian banking products with the help of RoyaleBank calculators, but even our own we couldn’t even check our balance on the internet bank. Our parents’ first fully Hungarian credit card, the Canube credit card, will soon be 25 years old and we will show you the fees for 1989!
We are writing in November 1989. Unrestricted revolutions are taking place in Central and Eastern Europe: “free elections” are held on 18 June in Poland, the fall of the Berlin Wall on 9 November, the fall of the Communist President the next day and the Velvet Revolution on 27 November , and on December 22, the region’s only blood-changing regime will win.
While the above-mentioned major historical events are taking place in the region, Hungary is also feeling the end of socialism in finance. From November 3 to November 4, the maximum amount to be converted into Western currency is up to $ 300 per capita, and for home loans, the interest rate will be 18.5% instead of the previous 3%, as the state cannot finance it earlier. promised support.
How were they advertised?
In the absence of the Internet, crude ads appear on the papers of economic and political reform newspapers with the slogan: “About money,” “Canube credit card. The currency of trust.” The ads advertise a contemporary credit card similar to today, but with a radically different advertising strategy: the 8 descriptive, affirmative sentences refer to the purchase of material, purchase of fuel, and in the end state that it can be used all over Hungary, You can contact a merchant who accepts a Canube credit card. The ad uses the term cardholder, although the customer is only a cardholder.
No matter how strange it is today, the Canube credit card, launched on November 1, 1989, was a real novelty at that time. At that time, ThinkOne Bank had only 2 ATMs in operation throughout the country and also accepted only one of its own credit cards, the ThinkOne Customer Card, with a rudimentary solution that was then misused by gatekeepers, so ThinkOne Bank would soon launch online forced his ATMs to prevent cardholders from spending unsecured.
What were the benefits of a credit card?
So it was the credit card of our parents, the Canube credit card, which functioned as the first Hungarian credit card and introduced many to the world of credit cards that existed only in Western films and even to its everyday benefits. Let’s see in 1989 what conditions our parents banked with the only credit card in Hungary:
- annual fee: 490 Ft
- monthly account management fee: 30 Ft
- cash withdrawal fee at bank branch: 0.2% + 30 HUF
- cash withdrawal fee by post: 0.2% + 30 HUF
- credit card purchase fee: 0.2% + 10 Ft
- interest rate (for spending on the credit line): 25% per annum
- deposit rate (to the positive balance): 17% per annum
- disbursement commission (for every credit line spend in addition to the transaction fee): 0.5%
- extension commission (in return there was no need to repay the end-of-month debt): 1%.
- retention commission (for unused portion of credit line): 2%.
While we are looking for fees for ATM transactions and foreign bank transactions, they were not available at that time. While Canubebank kept promising to install its own ATMs, these were never realized as their own ATMs, and the banks had to agree on the use of their ATMs, which took years. In practice, in the absence of nationwide coverage, the Canube credit card could be used for cash withdrawal only at post offices nationwide, for exactly the same fee as the bank’s own cash registers.
Where was it accepted?
Initially, Canubebank developed its own network of 1,200 merchants for the use of its cards for purchase purposes, completely separate from the approximately 1,500 domestic credit card acquiring networks at the time accepting foreign credit cards (and Hungarian currency cards). Only the latter joined the international card organizations and was supervised by the EBOSH Bank, which was replaced by EBOSH. (Later on, the Canube credit card also became a MasterCard logo, and since then it has become possible to use all Hungarian acceptance points.)
Thus, the Canube credit card was a completely unique Hungarian enterprise for the introduction of the Hungarian credit card, which had no connection with international organizations and their rules (for example, the borrowing rate immediately from the date of purchase) and of course could not be used abroad. Possible successful use abroad has been classified as a currency crime by contemporary legal regulations (up to the Foreign Exchange Act 1995). There was no interest-free spending period on the Canube credit card and there was no mandatory minimum repayment amount.
What did it look like?
Since card makers were not bound by international rules, card graphics were no longer mandatory elements (such as international logos and holograms), and, in the absence of market conventions, card graphics were traced to pioneering banknote graphics.
No electronic assistance was available to merchants at the time of acceptance. Instead, the daily mailing list of Canube credit cards received by mail was browsed by merchants before being accepted and hand-picked. card imprints were printed on imprints on imprinters, so that they would simultaneously enter credit card and acceptance information on the voucher without any human mistake.
For today’s eyes, it was also an interesting world, which you will probably read about in a later post.
The simplest of today’s credit cards is the RoyaleBank credit card calculator, which allows you to choose an up-to-date piece that fits your body.