The History of Major Credit Card

If plastic emerged as the king of manufacturing materials after World War 11, the idea of credit had come about much earlier, rising to preeminence during the Italian renaissance.

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

American Express Company

Established in 1850 in New York, American Express Company was among the first and most successful express delivery businesses to arise during the rapid westward expansion of the United States. 

The U.S. Postal Service at the time was slow, expensive and nonexistent in many areas. Nothing larger than a letter-sized envelope could be sent by mail, and certainly nothing valuable, as a fair number of deliveries were lost or stolen enroute.

It was founded in Buffalo, New York, as a joint stock corporation that was a merger of the express mail companies owned by Henry Wells, William Fargo, and John Butterfield as an express business and freight forwarding company. American Express first established its headquarter was at the intersection of Jay Street and Hudson Street in the TriBeCa section of Manhattan.

In 1874, American Express moved its headquarters to 65 Broadway in what was becoming the Financial District of Manhattan.

In 1882, American Express started its expansion in the area of financial services by launching a money order business.

1n 1891, American Express invented the Travelers Cheque. It was invented by Marcellas Berry an employee of American Express.

Traveler's cheques established American Express as a truly international company. In 1914, at the outbreak of the First World War, American Express offices in Europe were among the few companies to honor the letters of credit (issued by various banks) held by Americans in Europe, despite other financial institutions having refused to assist these stranded travellers.

At the end of 1957 American Express decided to get into the card business, and by the launch date of October 1, 1958 public interest had become so significant that they actually issued 250,000 cards prior to the official launch date. 

The card was launched with an annual fee of $6, $1 higher than Diners Club. The first cards were paper, with the account number and cardmember's name typed. It wasn't till 1959 that American Express began issuing embossed ISO 7810 plastic cards, an industry first.