Who Invented The First Credit Card?

4 credit cardsWe use credit cards all the time in our daily lives and never really think about where the first credit card came from. That little card had a significant effect on our finances and ways of doing business.

The first cards that were seen in the early 1900’s were ones that stores would have. Each individual store would have its own card and could only be used at that place of business. They were first created to develop customer loyalty and improve customer service.

In 1946, John Biggins invented the first bank card. He was a banker in Brooklyn and the card was called “Charg-It”.

The way it was used was that when you bought an item from a store, the bill was forwarded to the Biggins’ bank. The bank then collected the money from the customer and paid the store.

Similar to the way using a credit card happens today. The only drawback was that you needed to have an account at Biggins’ Bank in order to use it.

The Diners Club Card

diners club cardSource

In 1949 Frank McNamara was having business dinner in New York’s Major’s Cabin Grill when he realized that he forgot to bring any money to pay for the bill.

That was a turning point for the credit card as at the moment he decided that there should be an alternative to carrying cash.

In 1950  a cardboard credit card was created and called a Diner’s Card. It was mainly used for entertainment and travel purposes and became the first card that had extensive usage.

It didn’t take long and by 1951, Diners Club cardholders counted 20,000 members. These were charge cards and the account was paid in full by the end of the month.

American Express

In 1958 American Express came into the credit card arena with a purple card. Then in 1959, they created the first plastic card.

The earliest systems were known as “closed-loop” systems. The company that issues the card dealt with all parts of the transactions and was the connection between the merchant and the consumer.

Also in 1959, a system called the “revolving balance” started which was a bonus for cardholders. They no longer had to pay in full at the end of the month and could carry over charges to the following months.


1966 brought about the creation of an all-purpose credit card called the BankAmericard, we know it today as Visa.



Similarly, another group of banks formed together creating what was then called MasterCharge and is since called MasterCard.


This put Visa and MasterCard in competition with each other.

As the industry grew, the companies were able to work with businesses and smaller companies to handle their money exchange. At one time, as a business, you would need to either pick Visa or MasterCard to allow your customers to use, but not both.

For many years these two companies literally held the monopoly on the credit card industry until in 2004 a when a court ruling opened up the exclusive relationship that they had with banks to other credit card companies.

Credit Cards

This is when American Express and Discovery cards came more into balance with Visa and MasterCard.

visa and mastercard

Today credit cards are still a big part of the day to day finance and have become a lot more sophisticated over the years.

Chip Readers

The new chip card readers are now being used to forestall any theft of the cards as they develop and ingenious ways to keep your information safe.

Have a watch of this video below to see how the EMV chips are made. They are their own mini computer in your credit card.

I think it’s fair to say, that the invention of credit cards has made a huge difference on how we view money in this day and age and how credit is dealt with.

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