History of The Credit Card

The credit's concept had already existed around 3000 years among Ancient Babylonians, Egyptians and Assyrians. They were the earliest users of credit. However, it was only in 1730 that the first advertisement appeared in London for furniture which could be paid off weekly. By the late 18th century, a good credit culture existed, with merchants selling clothes in return for weekly payments. What the customers owed were tallied or recorded on a wooden stick. These merchants became known as "tallymen."

First user of the Credit Card

In 1887, author and lawyer Edward Bellamy first uses the term 'credit card' in his utopian book Looking Backward: 2000-1887. In it he imagines a future society where citizens carry a credit card issued.

Charge Cards in 1900

In the early twentieth century, charge cards issued by stores were popular among American consumers, but there was no single card which could be used to facilitate for all purchases. For a day of shopping, a consumer would need to carry a lot of cash or a wide selection of stores' charge cards. Frank McNamara saw the need for a middleman - a company which paid for the purchase and then billed the customer at a later date. He knew the ideas was a winner but needed to convince consumers hostile to the notion of a cashless society.

Frank McNamara's Fateful Event

In 1949, the head of the Hamilton Credit Corporation, Frank McNamara was dining out with his friends in New York's Major Cabin Grill. When he bill was brought to him, he found out that he had found his wallet with the cash in his other suit. An emergency call to his wife saved him from untoward embarrassment but it upset him that he could only spend the money he had in his pocket regardless to what he could afford.

Diners Club was Born

The untoward incident gave McNamara an idea of a 'credit card' and discussed it with his dinner companions, his lawyer Ralph Sneider and the department store mogul Alfred Bloomingdale. They eventually started the company "Diners Club."

To launch the card, a re-enactment of McNamara's dinner with his friends was done in the same place, at Major's Cabin Grill. This time he paid the bill with a small cardboard with the names of the 14 participating restaurants printed on the back. This event is known as the "the First Supper" in the credit card industry.

On February 1950, the first 200 Diners Club cards were issued. That time the user was not charged any interest, but instead, a 7 percent transaction fee was charged to the company that accepted the card. By the end of that same year, 20,000 Americans had signed up.

It was in 1952, after three years, that Frank McNamara thought his idea was a fad, He sold his shares in Diners Club to his two partners for over US$200,000. Other countries eventually followed using the card, including Diners Club in Australia in 1956, and the USSR, in 1969.

Diners Club First Competitors

American Express and the Bank Americard (later becoming Visa card) were launched in 1958, becoming the first competition of the Diners club card.

Diners Club in the Movies

In 1963, a Hollywood film entitled "The Man from the Diner's Club" was produced, starring Danny Kaye and Telly Savalas.

Credit Cards Live On: Buy Now, Pay Later

Plastic cards are great help especially in times of emergency and plastic cards companies can make it easy for the consumers. However, it can get us into financial trouble if used unwisely. Spending should be done with caution. If there are problems or if anything goes wrong, we have only ourselves as consumers to blame.