Credit Card

CREDIT CARD HISTORY

American Express was founded by Henry Wells and William Fargo on March 18, 1850. It started as an express mail business in Buffalo, New York. For years it enjoyed a virtual monopoly on the movement of express shipments (goods, securities, currency, etc.) throughout New York State.

American Express Co. shipping receipt, New York City to St. Louis, MO (August 6, 1860)

The first credit voucher, a precursor to credit cards was introduced in the UK by Provident Clothing Group in 1880. Customers were given vouchers to use in approved shops.

New York businessman Frank X. McNamara was treating guests to dinner when he realized he had forgotten his wallet. Fortunately the restaurant allowed him to leave his business card as an IOU. The incident inspired McNamara to devise a system to guarantee the holder’s ability to pay, the Diners Club card.

Credit cards were predicted in 1887, in a Utopian novel by Edward Bellamy called Looking Backward. 

Diners Club International was the first independent credit card company in the world,. Frank X. McNamara and his attorney, Ralph Schneider, founded Diners Club International on February 8, 1950. They started the company with 200 card holders. It allowed them to eat in any one of 27 New York restaurants and pay with the card.

The Bank of America launched their first credit card in 1958. It came in the form of a paper card and with a $300 credit limit.

The BankAmericard didn't require cardholders to pay off their balance in full each month. Instead, they could carry a debt with interest. The BankAmericard lost $20 million in its first year on the market because no one paid off their debt.

American Express launched their first charge card on October 1, 1958  with an annual fee of $6. It was $1 higher than Diners Club, so it could be seen as a premium product. The first cards were paper, with the account number and card member's name typed.

American Express launched the UK's first charge card on September 10, 1963 (annual fee £3 12s).

The first British credit card, Barclaycard, allowing repayments to be made over time was launched in 1966.

Credit and debit cards were first called ‘plastic money’ in 1969.

The early days of credit cards  of which BankAmericard was the most prominent example were marked by a unique marketing strategy called "drops," where banks would send out unsolicited credit cards to a vast number of potential customers, often in the tens of thousands at a time. These mass mailings were outlawed in 1970 due to the financial chaos they caused. However, by the time the law came into effect, approximately 100 million credit cards had been dropped into the US population. 

The development of the magnetic strip in 1971 revolutionized credit, debit and withdrawal cards.

Access credit cards were first introduced to Britain in 1972.

Bank of America decided to change the name of its credit cards from Bankamericard to VISA in 1977.

Master Card issued the first credit card to feature a person: the Elvis Presley Card in 1988.

Mythbusters were going to do an episode which highlighted the immense security flaws in most credit cards in the late 2000s. However, Discovery was threatened by, and eventually gave into immense legal pressure from the major credit card companies.

FUN CREDIT CARD FACTS

All credit cards everywhere are the same size: 85.60 mm x 53.98 mm.

There are two credit cards for every person in the United States.

The average American carries four credit cards.

Stacking all the credit cards in the United States would create a tower 288 miles.

Twenty-nine percent of American credit card customers pay only the minimum payment or close to it, even when they can afford to pay more, according to 2023 data from the National Bureau of Economic Research.

The largest purchase ever made on an Amex Black Card was made by Chinese billionaire Liu Yiqian in 2015.  Liu was the winning bidder for Amedeo Modigliani’s Reclining Nude at a Christie’s auction offering $170.4 million– and he paid for it with his American Express card.  The purchase has earned him and his family free first class travel for the rest of their lives.

Sources The New York Times, The Book of Firsts by Ian Harrison