A Brief History of Carding

[Papa Carder]

The history of carding, or credit card fraud, dates back to the late 19th century and has evolved alongside the development of financial technology. This phenomenon involves the illegal use of someone else's credit card or its details to make purchases or other transactions. Below, I will outline the key stages of its development based on historical facts, without any instructions or details that could be used for illegal purposes.

Early life: Late 19th – early 20th century​

The first recorded credit card fraud occurred in 1899 in the United States. At the time, credit cards were just beginning to emerge as a means of payment for services, such as travel on private carriages. A cattle rancher received such a card from a transportation company but threw it away, unwilling to use credit. Someone picked up the card and used it for expensive rides on rubber-tired carriages, racking up a debt of $27 (equivalent to over $700 today). The fraudster fled, leaving the victim with a loss. This was a simple case of theft and use of a recovered card, at a time when security systems were virtually nonexistent.

In the early 20th century, credit cards were rare, and fraud was limited to physical theft or document forgery. The overall volume of such crimes was small, but as cards became more popular (for example, from retail stores and oil companies), cases began to increase.

Mid-20th Century: The Spread of Maps and the First Systemic Problems​

By the 1950s and 1960s, credit cards had become widespread, thanks to companies like Diners Club and American Express. Fraud evolved: criminals stole cards from the mail, forged signatures, or used lost cards. In the 1980s, there were cases in the US of fraudsters calling banks, impersonating cardholders, to report a "lost" card and obtain a new one. The total cost of credit fraud in 1982 was estimated at approximately $1 billion, including bank, store, and gas cards.

By the late 1980s and early 1990s, banks introduced simple security measures, such as mandatory card activation by phone, to prevent the use of cards stolen from the mail. This was a response to mounting losses, reaching hundreds of thousands of dollars per victim.

1990s: Magnetic Stripes and the Dawn of the Digital Age​

With the introduction of magnetic stripes on cards in the 1990s, fraudsters adapted, using data-scrambler devices (skimmers) or altering the magnetic code to fake transactions. Online phishing emerged: one of the first tools was AOHell, a program designed to steal AOL user data, including credit card information.

Fraud involved both "familiar" and "unfamiliar" card application forgeries, where criminals used victims' personal information (obtained from email or databases) to open new accounts. Lost or stolen cards remained the most common form of fraud.

2000s: Explosion of online scams and underground markets​

With the rise of the internet, carding went digital. "Carding sites"—online markets for trading stolen card data—emerged. One example was the Kalashnikov Carding Club, where complete victim profiles, including mothers' names and social media links, were sold for $12–$35. Skimmers began to be installed on ATMs and payment terminals, often equipped with cameras, to steal PINs.

Large-scale schemes were uncovered in the 2000s: for example, in 2016, the leader of an international group that created over 7,000 fake identities to obtain tens of thousands of cards was convicted, having caused $200 million in damages. Phishing became widespread in the 2000s, when the internet reached millions of users.

The Modern Era: Carding as a Service and Global Threats​

Today, carding has evolved into "carding-as-a-service," where underground markets like Brian's Club and UltimateShop offer stolen data, tools, and support, similar to legitimate services. Fraudsters exploit leaked databases, phishing, and complex schemes, including credit card fraud.

According to 2021 data, approximately 50% of Americans have experienced card fraud. In 2023, the median cost of such crimes was approximately $116,545, with thousands of cases occurring annually. Banks and companies are implementing chips, biometrics, and AI to combat this, but the threat remains global.

This story shows how fraud is adapting to technology, highlighting the importance of financial security.