The Surprising History Behind Your Plastic Card: When Credit Cards Actually Started

You’re swiping that card without thinking twice, but have you ever wondered when did credit cards start? The answer might surprise you—it’s more recent than you think, and the origin story is filled with fortunate accidents and clever business moves.

Before Plastic: The Humble Beginnings

Before credit cards existed, the concept of buying on credit was already thriving. Back in the late 1800s and early 1900s, general store owners in rural areas would let customers purchase goods on credit, keeping track with simple ledger systems. Urban department stores copied this model.

To make things faster, merchants began issuing charge coins with account numbers—but here’s the catch: no customer name meant anyone could use your coin. That problem was solved with the Charga-Plate in 1928, a metal card that actually had your name on it. Still, each card only worked with one merchant. That limitation was about to change forever.

The Accidental Invention That Changed Everything

Here’s where it gets interesting. In 1950, Frank McNamara supposedly forgot his wallet at a restaurant. That embarrassing moment sparked an idea: why not create a card that works across multiple places? He partnered with Ralph Schneider and Alfred Bloomingdale to launch Diners Club International.

The Diners Club card was groundbreaking—it was the first card you could use at different merchants. It started with just 27 restaurants that agreed to accept it. However, there was a catch: you had to pay the entire bill every month, plus you’d face a 7% interest charge and a $3 annual fee. Interestingly, McNamara didn’t see much future in what he created. He sold his stake to Schneider and Bloomingdale for $200,000. Bloomingdale, on the other hand, predicted that credit cards would eventually “make money obsolete.” History proved him right.

When Did Credit Cards Start Becoming Mainstream? The Bank of America Game-Changer

The real revolution came in 1958 when Bank of America introduced the BankAmericard® in Fresno, California. This was the first truly modern credit card because it did two revolutionary things: it worked everywhere, and it offered revolving credit—meaning you could carry a balance without paying it all off immediately.

But how did Bank of America solve the biggest problem that had stopped other banks? It’s a chicken-and-egg situation: consumers wouldn’t get cards without merchant acceptance, merchants wouldn’t accept cards without cardholders. Bank of America’s solution was elegant. Since 45% of Fresno’s population banked with them, they mailed credit cards to all 60,000 of those customers at once. Suddenly, merchants in Fresno had a reason to accept the card. This became known as the Fresno drop, and it worked brilliantly.

The Competition Arrives and Cards Get Better

Other banks weren’t about to let Bank of America dominate. In 1966, several banks banded together to launch Master Charge (which later became Mastercard). The BankAmericard® eventually became Visa through a series of licensing agreements starting in 1976.

The 1980s was the decade when credit cards exploded in popularity. Interest rates dropped, spending increased, and something new appeared: rewards programs. Airlines got in first with frequent flyer tie-ins. Then came cash back, pioneered by Discover. Suddenly, using a card wasn’t just convenient—it was profitable for the consumer.

So, When Did Credit Cards Start? And Where Are We Now?

When did credit cards start being widely used? Really, it took decades. From McNamara’s accident-inspired Diners Club in 1950 to the consumer-friendly revolving credit model in 1958 to the rewards boom in the 1980s, credit cards evolved gradually. Today, over a billion cards circulate throughout America alone, and for many people, they’re not just a payment method—they’re a cash-back and travel rewards machine. The irony? The payment method that was once dismissed as a fad has become absolutely essential to modern life.