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These days, credit cards are everywhere. They can be used all over the world, providing almost instant access to cash and credit.
Credit cards as we know them today date back about 60 years, but buying on credit has been around for a while. European merchants offered credit
vouchers to customers as early as the 1890s. Stores also offered customers a paper or metal “card” that could be used only in their stores and for
years, it was up to each store to approve and monitor their customer’s creditworthiness. That changed after the Second World War,
with what is largely considered to be the first plastic charge card: The Diners' Club card.
Introduced in New York City in 1950, the card allowed Diners' Club members to eat at 27 restaurants in New York City on credit. However cardholders had
to pay the balance back in full to the Diners' Club within 30 days.
In 1951, Franklin National Bank became the first bank to offer a credit card to customers. The Franklin Charge Account, developed by Long Island, N.Y.
banker William J. Boyle, allowed customers to pay only part of the balance on their accounts each month, with the bank charging interest on the remaining
balance.
The program was created to handle fuel sales, but soon a number of New York department stores signed on to accept the card, followed quickly by stores
in other states. Under the program, the bank approved customers for credit and monitored their accounts, while stores paid a modest fee and agreed to a
code of conduct.
In the 1950s, credit cards were seen more as a service of convenience, meant to spare the customers the hassle of paying for everything with cash.
It wasn't until BankAmericard in that credit cards became a way for customers to finance expenses when they didn't have the means to pay.
The BankAmericard was the brainchild of banking executive Joseph P. Williams, who envisioned combining the convenience of a plastic charge card with
the allure of instant loans. The card was launched in 1958 across California. Despite a disastrous start – the company lost almost $9 million in the first
two years - BankAmericard spread to other states and by 1966 was being offered by other banks.
In 1976, BankAmericard was renamed Visa and has grown to be one of the largest credit card companies in the world.
Credit cards continue to evolve, with magnetic strips in 1970s, access to bank machine withdrawals in the 1980s, and today, the introduction of advanced
PIN and chip technology.
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