Thread by @finshots

How #credit cards were born.

A thread.

In the 1950s, a businessman in New York, Frank McNamara forgot his wallet while dining out, and had to call his wife to save him from washing the dishes.

This embarrassing episode led to the birth of the revolutionary Diners’ Club card- technically a charge card that requires full repayment at the end of each month.

And while it wasn’t a credit card per se, it was the first of a revolutionary concept - the use of plastic to make payments.

Years later, this seemingly innocuous idea led to one of the boldest experiments in capitalism.

In 1958, some 60,000 residents in the city of Fresno, California received a strange mail from the Bank of America - an envelope that enclosed a rectangle-shaped plastic engraved with their names, a long mysterious number, a good thru date, and the name - BankAmericard.

The citizens, who did not even have the dimmest awareness of such a device, were suddenly told that the plastic is loaded with $300 that they could spend however they wanted with no urgent pressure of repayment.

And even though the bank lost $15 mn as most customers never paid them back, they successfully habituated them to the concept of “Use now, pay later” which eventually spread like wildfire.

Close to a decade later, when BankAmericard became the nation’s first licensed general-purpose credit card, up came its biggest nemesis - MasterCharge.

Interestingly, even 55 years later, we’re all witnessing this rivalry - just in their modern-day forms of Visa and MasterCard.

And this experiment, not only marked the rise of the credit card but also the beginning of something larger - the dawn of what we now call "financial products," and the concept of revolving credit.

If you found this interesting, stay tuned as there's more coming.

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