History of Credit Cards: When was the first Credit Card made?
It has been become a way of life for Australians to use their charge card to buy services and products, but where did this all start and what was the first credit card?
The first credit card in Australia was actually the Bankcard – but due to market pressure in 2006 from Visa and MasterCard, the card withdrew from the Australian market.
The credit card is an invention of the 20th century. At the beginning of the century, cash needed to be paid for almost all services and products, although during the earlier part of the century there were store credit accounts for individuals. At that time there was no card available that could be used at different stores. This was invented in 1950.
The first credit card
In 1949 the head of the Hamilton Credit Corporation, Frank X. McNamara, went out to eat supper with Alfred Bloomingdale, the grandson of the founder of the famous Bloomingdale’s store, and his attorney. During the meal these three men discussed a client that was having a difficult time with paying back his charge cards for individual stores. After the meal, McNamara discovered that he had left his wallet at home and had no cash to pay for it. He had to call his wife and get her to bring the money to the restaurant.
McNamara ended up merging the two concepts that came from his dinner, the credit cards and not having the cash to pay for the meal, and had the idea of a credit card that could be used for different services and products at various stores. He envisioned a middleman being between the customers and the companies giving out the credit cards.
McNamara brought this idea to his attorney and Bloomingdale, which led to the start of the Diners Club. The Diners Club would be the middleman between individuals and companies.
They started out by enlisting different restaurants to take the new Diners Club credit cards since salesmen used these diners to entertain their clients. Two hundred of these cards were distributed in 1950, making it the first credit card of its kind.
These cards were made of a paper stock instead of plastic, and it took awhile before the concept got off the ground. Merchants were afraid that they would lose customers by accepting the card since their diners would no longer be using the individual store cards.
As the first credit card became more popular, 20,000 people were using it by the end of 1950.
The first credit card was the Diners Club card, and there was no competition for it until 1958 when the Bank Americard and American Express came into existence. Bank Americard later turned into Visa.
That is the history of the first credit card, and it is amazing to see what a difference it has made in consumer spending across the globe in such a small amount of time. Thousands of lives have been changed by this one simple concept thought up by one man on his own.
Australia's First Bank: Westpac
Westpac was the first bank in Australia. If you are after a credit card with a low interest rate on balance transfers and purchases, you should strongly consider the Westpac Low Rate.
- $59 p.a. annual fee
- 1% p.a. for 12 months (reverts to 13.49% p.a.) on purchases
- 0% p.a. for 18 months on balance transfers
- Cash Advance Rate of 21.49% p.a.
- Up to 55 days interest free
- Minimum Income Requirement of $15,000 p.a.