It may seem like you have been paying credit card interest since 3500 BC – but you might be surprised to learn that credit actually dates back to those ancient times.
Historians believe that the Sumerians of ancient Mesopotamia (in modern-day Iraq) extended credit to farmers in the rough equivalent of a consumer loan. The time lag between buying seed and harvesting grains to sell required up-front resources – just as it does today.
The first laws regarding credit were established in Babylon in 1800 BC. The Code of Hammurabi established formal contract rules for loans and caps on interest rates – perhaps an early form of consumer protection. To be enforceable, loans required recording and witnessing by a public official. Interest rate ceilings were high – 33.3% annually on grains and 20% on silver.
The concept of credit and interest continued through the ages, with occasional detours. For example, during Charlemagne’s rule in 768-814 AD, the charging of …