Photo: Mipsparc · CC BY-SA 4.0
1950
The first general purpose charge card was made for paying at restaurants.
5 min readLast updated
The short answer
Yes. Diners Club, founded in New York in 1950, is widely recognised as the first general purpose charge card. It started with restaurants and grew to hotels, travel and shops.
Why it's true
Before 1950, people could already use store cards or oil company cards, but each worked only with the business that issued it. Diners Club introduced something new: one card, from an independent company, accepted by many separate businesses. The company paid the restaurant, then billed the cardholder once a month and took a small percentage from the merchant.
It began modestly. Accounts say the first cards were made of cardboard and went to around two hundred people, accepted at fourteen New York restaurants. The idea caught on fast with business travellers and salespeople, who liked a single monthly record of their spending, and within a year the club had thousands of members.
Unlike a modern credit card, a charge card expected the full balance to be paid each month.
By the numbers
1950
Diners Club founded
14
Restaurants accepting the first cards
~200
Initial cardholders
1958
American Express and BankAmericard launch
The backstory
The founders were Frank McNamara, Ralph Schneider and, as publicist, Matty Simmons. The company's origin story says McNamara forgot his wallet while dining out in 1949, had his wife bring money, and came up with the idea of a card. Simmons later admitted the story had been polished for publicity, but the club itself and its 1950 launch are well documented.
The first Diners Club meal is often called the First Supper, at a New York restaurant named Major's Cabin Grill. The success inspired competitors. American Express launched its charge card in 1958, and the same year Bank of America introduced the BankAmericard, which later became Visa and helped popularise revolving credit.
Worth remembering
- Diners Club launched in New York in 1950.
- It was the first card from an independent company accepted by many unrelated businesses.
- American Express and BankAmericard followed in 1958.
In context
Paying later is ancient. Merchants have extended credit for thousands of years, using tally sticks, ledgers and handwritten accounts. What changed in the twentieth century was scale: a single card that strangers in different cities could trust. Diners Club proved that model worked, and it paved the way for the card networks most people now use every day.
The business model was the real invention. A card company standing between buyer and seller, guaranteeing payment and charging a fee, is how most card networks still work. The plastic, the chips and the phones have changed, but the basic arrangement Diners Club tested over dinner has stayed remarkably stable.
A closer look
Why restaurants signed up
At first glance, giving away a percentage of each bill sounds like a bad deal for a restaurant. But Diners Club brought customers who could spend without carrying cash, especially business diners entertaining clients. Those customers tended to order more and return more often.
The club also took on the risk of collecting payment. If a member did not pay, that was the club's problem, not the restaurant's. That guarantee became a central feature of card networks.
From cardboard to plastic
Early cards were paper or cardboard, and businesses copied details by hand. Plastic cards with raised lettering came later, allowing machines called imprinters to press the details onto carbon slips.
Magnetic stripes arrived in the 1970s, then chips and contactless payment. Each step sped up the same basic idea Diners Club started with: a trusted card, accepted by many businesses.
The status symbol
In the 1950s, carrying a Diners Club card signalled that you were a trusted, well travelled professional. Membership was marketed partly as prestige.
That image helped the card spread beyond New York to other American cities and then abroad, as hotels, airlines and car hire firms joined the network.
Related facts
Paying later is an ancient idea split tally sticks recorded debts.
For what physical cash is made of US paper money is mostly cotton.
Checkout technology has its own firsts the first barcode scan was a pack of gum.
Restaurants and money mix in surprising ways how McDonald's really makes money.
Key terms
- Charge card
- A payment card whose full balance must be paid each billing cycle.
- Merchant fee
- The percentage a business pays the card company on each card purchase.
- Revolving credit
- Borrowing that can be repaid and reused, with interest on unpaid balances.
Myth vs reality
Myth
Diners Club was the first credit card of any kind.
Reality
Store and fuel cards came earlier. Diners Club was the first card from a third party accepted by many unrelated businesses.
People also ask
What is the difference between a charge card and a credit card?
A charge card expects the full balance to be paid each month. A credit card lets you carry part of the balance over and pay interest on it.
Who founded Diners Club?
Frank McNamara and Ralph Schneider founded it in 1950, with Matty Simmons handling publicity. The company started in New York City.
Is the forgotten wallet story true?
It is the company's famous origin story, but Matty Simmons later said it had been embellished. The basic facts of the 1950 launch are not in doubt.
How did Diners Club make money?
It charged merchants a percentage of each bill and charged members a yearly fee. Restaurants accepted the cost because cardholders tended to spend more.
Does Diners Club still exist?
Yes, as part of a larger card network. It remains one of the oldest surviving card brands in the world.
