In American why do we use Area Codes for phone calls?

I'm an exchange student and my host family was confused about the first 3 numbers in my phone number. When I tried to explain it to them I just confused them. I know its obviously an Area Code but I'm having trouble explaining simply to them why we need/use them.In American why do we use Area Codes for phone calls?
A U.S. phone number consists of an area code, an exchange, and a terminal number. Just like your first name, middle name and last name further identify you, the phone numbers need to be defined. Potentially, 348 or so people can have a phone number like 422-1234, bot only one person has 212-422-1234. The 10 digits define where the phone is located.
In many parts of the US you can dial only 7 digits for local calls, but since there are more than10 million people in the US, a complete phone number has 10 digits.In American why do we use Area Codes for phone calls?
When land lines started, not many people had them so the local calls went thru an operator. You would just tell her who you wanted and the number.



As more people got phones the telephone companies started running out of numbers. Thats when they started adding area codes. Like the other person said, you can make local calls with only 7 numbers but when you have to put in an area code other than your own, it's usually a long distance call that isn't free.In American why do we use Area Codes for phone calls?
Robert is pretty much on target. We started with 3 and 4 digit dialing way back. As he said as more and more people got telephones the numbering system had to be expanded. Then we jumped to 5 digits and shortly after that 7 digits. Then direct long distance dialing came along in late 50's and early 60's. Since the same 7 digits were being used everywhere the system had to expanded again; this time to make every area of the country unique. Hence the area code was born. Because of several factors (second lines in many homes, cell phones, pagers, fax lines, modems, etc) in the last 20 years the country has really burned through numbers. Now several larger cities have more than one area. Atlanta, Ga now has three 404, 770 and 678 and 470 is in the process of being implemented. In locations like that you are now required to dial 10 digits for all local calls. That's xxx-xxx-xxxx and not 1-xxx-xxx-xxxx which would be long distance. We will run out of area codes in the not to distant future and there are already plans being made to expand the telephone numbering system again.
Basically so you can direct dial anywhere, and still keep the local numbers small (although that generally does not apply anymore, since the releif of choice is overlaying new area codes on existing, making the local number 10 instead of 7 digits. If there were not area codes, you would need to call an operator to connect to other systems and areas.