The history of credit cards
They're so common now we don’t even think about them. As we punch in our pins, paying for everything from holidays to cinema tips, we don't spare a passing thought for those little pieces of plastic we carry around with us.
But, how did it start? Where did it all begin? Credit cards are older than you think...
As far back as 1900s oil companies and department stores had their own proprietary cards. Created for loyal customers, these cardboard cards helped improve service and could only be used in one store at a time.
Back then credit cards looked nothing like the plastic rectangles we carry around today. Early versions were often made from paper and cardboard, but could be made from celluloid, fibre and metal plates.
According to MasterCard the first bank card, 'Charg-It', was introduced in 1946 by Mr. John Biggins, a banker in Brooklyn. When a customer used the card to make a purchase, the bill was sent to Biggins' bank. The bank reimbursed the seller and then received payment from the customer. Purchases, however, could only be made locally and Charg-It cardholders had to have an account at the bank.
The First Supper
In 1949 Mr. Frank McNamara was on a business dinner in New York at the Major Cabin Grill. After finishing his meal and asking for the bill, he realised, to his disbelief, that he had misplaced his wallet. Luckily, he was dining with his wife who happily paid for their meals.
Angry at his mistake, he vowed never to let this happen again. One year later he returned to the restaurant and paid for his meal with a small cardboard card – the Diners Club Card.
Two years later, in 1951, there were 20,000 Diners Club cardholders who could use their cards in 27 New York restaurants. A decade later the Diners Club Card went plastic.
By the 1960s, many companies were offering credit cards. American Express and MasterCard were widely used, by both customers and retailers.
The magnetic strip used on today's credit cards was invented in the early 60s, was adopted as a U.S. standard in 1969 and was set as an international standard two years later. Its invention meant that just about anyone could use a credit card, just about anywhere.
Not bad for something that started out life as a cardboard I.O.U.