Blame the 50’s for our Credit issues!

Jun 19th, 2013 | By | Category: Lifestyle

Nowadays, receiving a bank credit card is standard procedure upon opening a checking account. But when exactly did bank cards

courtesy of tackorama

courtesy of tackorama

become a part of our culture? Crediting the Mid-Century with the introduction of, well, credit would be historically inaccurate. . .the practice dates back to the late 1800s with inventions such as charge plates and credit coins. The bank card, however, was invented in

1946 by a Brooklyn banker, John Biggins.

The card was called “Charg-it” and could only be used locally. Users had to have an account at Biggin’s bank which would reimburse charges and then collect from the customer. Although none of the resources mention whether “Charg-it” transactions garnered interest, by 1959 other financial institutions developed a revolving credit system with which customers could choose to either pay off their balance immediately, or maintain their balance and incur a finance charge.

In 1951, the first bank credit card become an option for loan customers at New York’s Franklin National Bank. But the first real credit card was the 1950’s Diner Club travel and entertainment card. This card was born of the necessity of businessman Frank McNamara who had forgotten to bring his wallet to a business dinner at Major’s Cabin Grill in New York. This social faux paux occurred in 1949 and McNamara was permitted to leave Major’s Cabin Grill on the premise that he pay. In 1950, he and his partner, Ralph Schneider paid the bill with the first cardboard Diner’s Club card, which had to be paid off in full by the end of the month. The Diner’s Club Card skyrocketed in popularity, obtaining 20,000 users by 1951.

By the late 1950’s, credit cards like the American Express card (American Express was founded as a company in 1850 and specialized in postal service money orders and eventually traveler’s checks) and the Bank of America Americard came into existence. Credit cards switched from cardboard to plastic by the early 1960s.

Sources: Ceditcards.com and Gotmerchant.com

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