The History of the First Credit Card in History: Diners Club and Others

When and for what purpose was the first credit card used? Here is the history of credit cards.

The history of the concept of credit dates back to ancient civilizations, when merchants gave loans to customers in exchange for goods and services. But the first formalized credit systems appeared much later, in the 19th century, when department stores and hotels began using small metal cards engraved with the customer’s name and account number. These cards allowed customers to make purchases on credit and pay the bill later, but because they lacked the security measures found today, such as magnetic strips or embedded microchips, they quickly became susceptible to fraud. Additionally, since it was made of metal, it was prone to damage or loss. Moreover, each merchant had a unique credit card, which led to serious confusion for consumers to take the card of each shop.

Years later, businessman Frank Mcnamara came up with the Diners Club card when he forgot his wallet at home while eating at a restaurant in New York in 1949. Mcnamara introduced this card in 1950, which allowed people to shop easily without having to carry cash on them. This card was initially intended to be used only at participating restaurants, but soon other establishments followed suit and got involved. By 1951 Diners Club had 42,000 members, and by 1953 it was accepted in Canada, Cuba, Mexico and the United Kingdom. But unlike other credit cards, the diners club card was originally a charge-only card, meaning the balance had to be paid in full each month. Over the years, as it was only valid in certain places such as restaurants and as the sector grew, it was replaced by the Bankamericard, the first widely used credit card produced by the Bank of America in 1958. In 1966, a group of banks founded the Interbank Card Association, which later became Mastercard. Mastercard also aimed to create a dealer network where cardholders could use their credit cards, and this success has survived to this day.

Years passed and credit cards continued to develop chronologically as follows: magnetic stripe technology emerged, allowing faster and safer transactions. A few years later, debit cards became popular, allowing users to access funds directly from their bank accounts. At the beginning of the 21st century, smart cards, also known as chip cards, began to replace magnetic stripe cards. With the rise of smartphones, services such as Apple Pay, Google Pay and Samsung Pay allowed users to make contactless payments.

This was the story of the credit card, which is in everyone’s pocket today, some regret it, and some use it fondly. It is unknown what the future will bring, but don’t be surprised if we see much more interesting developments in a few years 🙂

By Maria Koloniv

Hi there. I'm Maria Koloniv. Lets explore the world together

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