When was the credit card invented? And by whom?

When was the credit card invented? In 1946, John Biggins, a banker at Flatbush National Bank in New York, invented the first credit card, which was still regionally limited. The introduction of the Diners Club Card in 1950 finally led to the worldwide spread of credit cards.

The invention and introduction of the credit card are prime examples of innovation in the financial sector. They reflect changes in the economy, technology, and consumer behavior.

How did the credit-based purchase begin?

The history of credit goes back a long way. Even in ancient civilizations, there were forms of trade and barter based on credit. In the 19th century, the first customer credit developed in Europe and America. Department stores began to offer credit programs to their customers to facilitate the purchase of larger and more expensive goods. These early credit programs laid the foundation for the concept of the credit card.

The idea of a universal credit card, accepted beyond individual stores, emerged in the early 20th century. An interesting literary example is Edward Bellamy’s 1888 novel “Looking Backward”, which describes a card-like form of payment. This suggests that the concept of a general credit card existed in people’s minds long before it was actually invented.

How did the credit card spread?

The history of the credit card, as we know it today, is a fascinating journey closely linked to the development of modern consumerism and financial services. This story begins in the late 1940s, a time of economic boom and technological innovation, and evolves into a global phenomenon that fundamentally changed how we do business. The spread of the credit card can be described in the following 4 steps.

1. Invention of the credit card
2. Breakthrough with the Diners Club Card
3. Expansion and competition
4. Global integration into the financial system

1. Invention of the credit card

1946 was a pivotal year in the history of the credit card. John Biggins, a banker at Flatbush National Bank of New York, created the first actual credit card system, known as“Charg-It“.

This program was initially limited to local businesses and bank customers. The bank settled purchases made with the “Charg-It” card, and customers later paid the bill to the bank. Although this system was still rudimentary and regionally limited, it laid the foundation for the future development of credit card systems.

2. Breakthrough with the Diners Club Card

The next milestone in the history of the credit card was the introduction of the Diners Club Card in 1950. Frank McNamara, the founder of Diners Club, had the idea of creating a card for business people that would allow them to pay their restaurant bills conveniently and without cash.

The Diners Club Card was the first card to be accepted beyond individual merchants or regions and marked the beginning of the era of credit cards as a universal means of payment.

3. Expansion and competition

In the years that followed, the credit card began its triumphal march around the world. Companies such as American Express expanded the concept of the credit card (the first Amex came out in 1958) and also offered them for other services and goods. The cards were no longer just a means of paying restaurant bills but became an important tool for travelers, businesspeople, and later, for broad private consumption.

In the 1960s, other players, such as Visa and MasterCard, entered the scene, further revolutionizing the credit card concept. They introduced the concept of bank-issued credit cards and allowed them to be accepted worldwide. This marked the beginning of a new era of global, cashless commerce.

4. Global integration into the financial system

In the following decades, the credit card experienced rapid development and spread. It became a globally recognized symbol of financial reliability and freedom.

The integration of credit cards into the global financial system was a complex process that required new regulations, technological developments, and international cooperation. Banks and financial institutions worldwide joined the credit card network, steadily increasing the acceptance and availability of credit cards as a means of payment. With the introduction of the CVV, magnetic strips, and later chips, credit cards became more secure and user-friendly.

What do modern credit cards offer?

Today, there is a vast array of credit cards offering various features and rewards programs, including insurance and cashback. Future forecasts point to the integration of biometric procedures and an even closer link with mobile payment systems. The trend is clearly moving toward further digitalization and simplification of cashless payment transactions.

If you still need a credit card, take a look at our comparison of credit cards. We have found the best card for each user category.