In 1950, however, plastic and credit came together to produce something brand new in the world: the major credit card.
As early as the beginning of the twentieth century, some American hotels began offering customer cards they could use to charge their room and some other hotel services.
This was not only convenient for the customer; it worked to keep patrons coming back to the same hotel.
By the era of World War 1, a good many urban department stores started issuing “charge plates” to select customers.
These thin metal plates were embossed with the customer’s name and used to imprint receipts for merchandise purchased on credit. Charge plates became so pervasive that the term charge plate was often applied even to the later plastic cards.
Finally, by 1924, gas station affiliated with national oil companies began issuing credit cards which were usable in any gas station affiliated with the oil company that had issued the card.
McNamara ran Hamilton Finance, a small loan company in New York City. One of his customers had a great many department store charge accounts and made a practice of lending his cards to friends, whom he would charge for the use of them.
He borrowed finds from McNamara (who knew nothing of his customer’s scheme) to pay off the outstanding debt accumulated on the cards, then pocketed the profits when his “customers” paid him.
It was a nice way to pick up some extra cash – until one of his clients turned deadbeat, stiffed him, and prompted him, in turn to default on a loan from McNamara.
McNamara began to think: instead of lending a fistful of cards to a bunch of people, why not create a single card that could be used in many different places and then market that card to a large number of people?
In February 1950, McNamara and his other friend jointly opened an office in the Empire State Building and quickly persuaded a small number of New York City restaurants to serve meals on credit, to members of what they dubbed the Diners Club.
The History of Major Credit Card
