We use it almost without realizing it and it has become an essential element in today’s lifestyle, but since when do we carry credit cards in our wallets?
Its origin dates back to the first decade of the 20th century in the United States when, in 1914, the Western Union company created a card for its most select customers that allowed them to access preferential treatment and have a line of credit without charges.
Years later, other companies – hotels, department stores or gas station companies (General Petroleum, in 1924) – issued credit cards to their customers. However, its expansion was slowed down by the fact that these cards could only be used in specific geographical areas and establishments and, above all, due to the stock market crash of 1929.
“I forgot my wallet…”
But the creation of the credit card concept as we know it today was born from an event that occurred in 1949, when Frank McNamara, director of the Hamilton Credit Corporation, invited two friends -his lawyer, Ralph Schneider, and Alfred Bloomingdale- to an elegant and luxurious restaurant in New York.
As it was time to pay the bill, McNamara realized she had forgotten the money. Although his wife rescued him from this mishap, he determined never to go through that embarrassment again. To do this he thought of a system by which a person could demonstrate his credit worthiness in any place he visited.
Thus, uniting the search for a secure and personal credit payment system together with the convenience of paying in several establishments with the same card, McNamara created in 1950, together with Ralph Schneider, Diners Club (Club de Cenadores, referring to the famous dinner). The first card is offered to 200 people, most of them personal friends and acquaintances. Fourteen New York restaurants accepted the use of the card in their establishments.
The rapid growth of Diners Club
Although the form was very similar to the current ones, the first material used for them was a type of paper, with the conditions of acceptance on the back. At first, the system was simple, since all Diners Club members were known by the restaurant and hotel staff who agreed to join the system, all they had to do was sign as a guarantee of future payment.
The business expanded so rapidly that Diners Club had to change its offices three times: starting on the 24th floor of the Empire State Building, then moving to the 32nd, finally ending up on the 77th floor. By the end of the year, 20,000 people owned Diners Club cards.
The business model was based on acting as an intermediary between the establishment and the buyer, charging a commission per transaction to the first and a maintenance commission (3 dollars per year in 1951) to the second, in exchange for a deferred payment at the end of the month without interests.
By 1951, the major cities where the card was already accepted included, in addition to New York, Miami, Boston, Chicago, Los Angeles, and San Francisco. In that year, eight car rental agencies agreed to accept the card. In the month of January 1951, 35,000 people owned a Diners Club, in March the figure was 42,000; in January, 285 establishments accepted the card, in March the number increased to 330.
It continued to grow and had no competition until 1958 when the first American Express was launched – from the financial services company of the same name, which already issued money orders and traveler’s checks – and BankAmericard (currently known as VISA) and the Interbank Card Association (currently known as VISA) were born. Master Card). The modern credit card was born.
Photo: card of the year 1990. Diners Club.
The credit card in Spain
In April 1971, the first bank card was launched in Spain by the Banco de Bilbao. In alliance with BankAmericard, this first credit card allowed full payment at the end of the month or deferment with a percentage of 10% of the drawn balance, with a maximum limit of 25,000 pesetas.
The success of this revolutionary means of payment, also accepted internationally, meant that in that year the Bank of Bilbao issued 742,000 cards in Spain, compared to the initial forecast of 215,000. In addition, in the first three months since the launch, a total of 5,200 businesses already accepted the card as a means of payment.
In 1974, the Spanish banks Banco Central, Hispano Americano, Español de Crédito and Santander joined forces to found 4B. It would be the first of the three large card networks in Spain, to which Red 6000 (currently Euro 6000) would be incorporated a year later and as a union of all the Savings Banks.
Later came the years of implementation and extension of the bank card, a stage in which the birth of VISA (1976) was essential. Likewise, other entities that would end up forming BBVA, such as the Banco de Vizcaya or the Banco Exterior de España, also began issuing their own cards.
It had all started with a simple, but transcendental, oblivion… Plastic money changed our way of living, of consuming, stealing prominence from money as we knew it. But the evolution in the forms of payment with new technologies is already a reality that is also leaving credit cards themselves in the background.
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