Credit cards as we know them started in 1950 with Diners Club

The first credit card you could use at multiple merchants was the Diners Club card, launched in February 1950. It was created by Frank McNamara and Ralph Schneider, who wanted a way to pay for restaurant meals without carrying cash. The card worked at 27 restaurants in New York City at first. Cardholders paid the full balance each month — there was no option to carry a balance or pay interest, which is different from most credit cards today.

Before Diners Club, stores and gas stations issued their own cards that worked only at that one business. A person might carry a Sears card, a Shell gas card, and a Macy's card, each one usable nowhere else. Diners Club was the first card that let you use the same piece of plastic at many different places.

Key Takeaways

  • Diners Club, launched in 1950, was the first credit card that worked at multiple merchants rather than just one store.
  • American Express entered the market in 1958 and created the green card, which also required full monthly payment at first.
  • Bank of America issued the first card that let you carry a balance and pay interest, called the BankAmericard, in 1958.
  • The BankAmericard eventually became Visa, and Mastercard (originally Interbank Card) launched in 1966.
  • Credit cards only became widespread in the 1970s and 1980s, when computers made it possible to process transactions quickly.

American Express and the green card arrived in 1958

American Express launched its card in 1958, eight years after Diners Club. The American Express card was green and became iconic. Like Diners Club, it required cardholders to pay the entire balance each month. American Express positioned itself as a card for business travelers and higher-income customers, while Diners Club had broader appeal.

Both Diners Club and American Express cards were charge cards, not credit cards in the modern sense. You could not borrow money and pay it back over time with interest. You used the card to charge purchases, then paid the bill in full when it arrived.

Bank of America created the first true revolving credit card in 1958

The same year American Express launched, Bank of America introduced the BankAmericard in California. This was the first card that let you carry a balance from month to month and pay interest on what you owed. You could charge something, pay part of it back, and owe interest on the rest — the model that defines credit cards today.

The BankAmericard was revolutionary because it gave cardholders a choice: pay the full balance, or pay a minimum amount and carry the rest forward. This made credit cards a lending product, not just a payment convenience. The BankAmericard eventually became Visa in 1976.

Mastercard and other bank cards followed in the 1960s

Mastercard started as the Interbank Card in 1966, created by a group of banks that wanted to compete with Bank of America's BankAmericard. Interbank Card was renamed Mastercard in 1969. Like the BankAmericard, it allowed cardholders to carry a balance and pay interest.

Throughout the 1960s, many regional banks issued their own cards, but most eventually joined one of two networks: the Visa system (which grew from BankAmericard) or the Mastercard system. This consolidation happened because merchants and customers both wanted cards that worked across many banks and many states, not just locally.

Credit cards did not become common until the 1970s and 1980s

Even though credit cards existed in the 1950s and 1960s, they were not widely used. Processing a transaction required manual steps: the merchant would write down the card number, call the bank to verify the card was valid, and wait for approval. This was slow and expensive.

The real shift came in the 1970s and 1980s, when computers and electronic networks made it possible to process transactions in seconds. Merchants could swipe a card and get instant approval. Suddenly, credit cards became practical for everyday purchases, not just travel and restaurants. By the 1980s, credit cards were becoming a normal part of how Americans paid for things.

Store cards and gas cards existed long before Diners Club

Retailers and gas stations issued their own cards starting in the 1920s. Sears, Macy's, and other department stores let regular customers charge purchases and pay monthly. Gas stations like Shell and Texaco did the same. These cards were convenient for loyal customers, but each card only worked at that one business or chain.

The innovation of Diners Club and American Express was not the idea of charging purchases — that was already common. The innovation was creating a card that worked at many different merchants. That required a network to connect the card issuer, the merchants, and the banks, which was expensive and complicated to build in 1950.

Frequently Asked Questions

Did credit cards exist before 1950?

Store cards and gas station cards existed in the 1920s and 1930s, but they only worked at one business. Diners Club in 1950 was the first card that worked at multiple merchants. Before that, a person might carry five or ten different cards, each one usable nowhere else.

Why did it take so long for credit cards to become common?

Processing a transaction was slow and manual. A merchant had to write down your card number, call the bank, and wait for approval — sometimes several minutes. Computers and electronic networks in the 1970s and 1980s made instant approval possible, which is when credit cards became practical for everyday use.

What is the difference between a charge card and a credit card?

A charge card requires you to pay the full balance each month. A credit card lets you carry a balance and pay interest on what you owe. Diners Club and American Express started as charge cards. Bank of America's BankAmericard was the first true credit card because it allowed revolving balances.

When did Visa and Mastercard start?

Visa began as Bank of America's BankAmericard in 1958 and was renamed Visa in 1976. Mastercard started as the Interbank Card in 1966 and was renamed Mastercard in 1969. Both systems grew because banks wanted a shared network instead of each bank issuing its own card.