Plastic fantastic

It is 1966, England is poised to win the World Cup, the Beatles are at number one and no one in the country has a great big credit card bill to pay off.

How things change. England may still be in with a chance of a trophy, but the Beatles are history and the UK has a combined credit card balance of more than £32bn.

Today marks the 40th birthday of the credit card. The first card provider, Barclays, sent the cards to 1 million handpicked customers with a pamphlet explaining what they could do with the small rectangles of plastic they had received. It could be argued that the bank courted controversy from the outset by sending the cards out unsolicited.

Barclays also took out a record eight pages of advertising in the Daily Mail to lure more customers, and the way British consumers spent money changed for good:

· The first cardholders had a credit limit of £100, which they could spend with 30,000 retailers across the UK. The limit may sound small, but is roughly equivalent to the average credit limit for a new customer today. In 1966, however, customers had to repay their balance at the end of each month.

· For six years, Barclaycard was the only card available. In 1972, the Midland, National Westminster and Lloyds banks teamed up to launch the Access credit card.

· There are now more that 60 credit card providers, and in 2004 spending on plastic overtook spending with coins and notes. Some £273bn was spent on credit and debit cards, compared with £272bn using cash.

· In 2005 there were 31.6m credit cardholders in Britain with an average of 2.4 cards each. Each month, we spend about £10bn on credit cards, with that figure rising by at least 10% in the pre-Christmas shopping season.

· Anthony Jenkins, Barclaycard's chief executive, says: "Cards are now the British consumer's first choice in how they pay and access to credit is an important factor in the UK economy, attracting investment from companies worldwide and helping to balance out the peaks and troughs in the economy."

· But critics suggest they have triggered a national obsession with credit, too. Britain is now more than £1 trillion in debt and counting.

· According to the money education charity Credit Action, the average British adult had a total of £4,109 in borrowing, spread across credit cards, motor and retail finance deals, overdrafts and unsecured personal loans as of April. The total has grown by 52% over the past five years. According to the group, the UK gets itself £1m deeper into debt every four minutes.

· New technology looks set to change our spending habits further. With chip and pin now rolled out, Visa and MasterCard have begun trials using "contactless payment" cards, which can be held over a sensor to pay for low-value items.