‘credit cards have only been around for about 50 years’

by Grace

It seems almost crazy now to think that credit cards were just getting started about half a century ago….

Many of us find it hard to imagine navigating through life without a credit card to pay for things like online purchases, department store shopping sprees, or a latte at the corner coffee shop.  Use cash or checks?  That’s so inconvenient!  (A debit card is handy for some cash purchases, but it does have its drawbacks.)

Some history

Credit cards as we know them — with their Visa V -1.03%  , MasterCard, Discover and American Express logos in the corner — first emerged in 1958, when Bank of America started BankAmericard. That was the first consumer credit card available to middle-class consumers and small- to medium-sized merchants in the U.S., according to Visa’s website — BankAmericard was the first of the global brand of products that became Visa.

MasterCard came along in 1966 (the same year a debit card pilot program began at the Bank of Delaware), but the roots of the credit card go back even further.

Remember Diners Club?

It started in Brooklyn, when the Flatbush National Bank issued cards for local use in 1947. Local merchants could deposit sales slips at the bank and the bank billed the customer who made the purchase. But the big industry breakthrough came in 1950 when the Diners Club card became the first charge card — Diners Club founder Frank McNamara was at dinner and realized his wallet was in another suit, which inspired him to create the card. It allowed restaurant patrons to settle their bill at the end of each month.

First there were “charge” cards, which required payment in full each month.

These were charge cards, which means the cardholder had to pay his or her account in full when billed, unlike credit cards, which allow you to carry a balance. (Credit cards can be helpful in emergencies and for financing large purchases, but the shift from charge to credit cards has enabled overspending, which has contributed to the $856 billion in outstanding U.S. credit card debt. Perhaps we should have stuck with this charge-card thing.)

American Express also started offering charge cards in 1958, but didn’t offer credit cards until 1987.

I vaguely remember knowing the distinction between a “charge” card and a “credit” card.  But I do remember when my American Express card had to be paid off each month.

You can’t earn points by paying for college with a credit card.

It would be nice to be able to get reward points by paying college tuition with a credit card.  Unfortunately (or perhaps fortunately), that’s usually not an option.  Either the schools won’t accept credit card payments, or they charge a processing fee that wipes out any financial benefit.

Related:  College debt levels higher than all other types of consumer loans (Cost of College)


Christine DiGangi, “Where did credit cards come from?”, MarketWatch, April 8, 2014.

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