Bank of America launched the modern credit card by mailing a whole city
Nobody wants a card few shops accept, and shops will not bother with a card few people carry. In 1958 Bank of America broke that stalemate in Fresno, California, where 45 percent of residents already banked with it, by sending cards to 60,000 people at once. That BankAmericard eventually became Visa.
Buying on account is much older. From the late 19th century, hotels and department stores handed regular customers charge tokens of celluloid or metal, some coin-shaped with a hole for a key ring, stamped with an account number. Farrington Manufacturing introduced the Charga-Plate in 1928, a small embossed metal plate pressed onto a sales slip to copy the customer's details, sometimes kept in the store's files rather than the shopper's pocket. American Airlines teamed up with the Air Transport Association in 1934 to create the Air Travel Card, letting passengers buy now and pay later with a 15 percent discount; by 1941 about half of airline revenue flowed through it.
All those cards were issued by merchants for their own customers. Diners Club, founded in 1950 by Frank McNamara and Ralph Schneider, offered the first general-purpose charge card, usable at many businesses but settled in full every statement. American Express built a worldwide charge network from 1958. The bank card differed by allowing a revolving balance that accrues interest. Rival banks formed Master Charge in 1966, forerunner of MasterCard, and BankAmericard licensees united under the Visa name in 1976. Barclaycard, launched in Britain in 1966, was the first credit card outside the United States.
Early growth was reckless. Banks mass-mailed unsolicited cards, known as drops, and Life magazine reported them reaching drunks, addicts and compulsive debtors. By the time the practice was outlawed in 1970, about 100 million cards had been dropped on the American public. Fraud checks meant thumbing through printed books of stolen numbers until Visa's first chief executive, Dee Hock, computerised the system in 1973.
Adoption spread unevenly. Countries with cash habits or their own payment systems, such as Carte Bleue, lagged, and Japan still leans on cash, with cards mostly taken at big merchants. By June 2018 the world held 7.75 billion credit cards.
Source: Credit card
