Finshots Profile picture
22 Jul, 10 tweets, 2 min read
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.

Make sure you also check out our latest endeavor-

• • •

Missing some Tweet in this thread? You can try to force a refresh

Keep Current with Finshots

Finshots Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!


Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @finshots

20 Jul
Why did RBI ban Mastercard?

A thread.
It’s official - Global cards giant Mastercard has been barred by the RBI from onboarding new clients in India. And there’s a solid reason behind it.
Well, this comes due to the company’s alleged non-compliance with the RBI on data localization norms.

Of late, countries like Russia & China, and now India - are insisting on this requirement to secure their citizen’s data within their own soil.
Read 11 tweets
19 Jul
Which are the most exported products from various states? #India
Here's a follow-up graphic with the respective state names
If you love what we do at Finshots, make sure you support us by checking out our latest initiative- @joinditto :)
Read 4 tweets
15 Jul
Will a new airline company take off in #India right in the middle of a pandemic?

A thread.
News flying in from the aviation industry suggests that the big bull of Dalal Street, Rakesh Jhunjhunwala, is planning to invest up to Rs. 260 crores in a new low-cost airline called “Akasa” with Mr. Vinay Dube (ex CEO of Jet Airways and GoAir) as its tentative head.
And you must be wondering - Why would they try to set up a new airline bang in the middle of a pandemic?

Sounds like a terrible idea, no?
Read 10 tweets
13 Jul
How an experiment to ban alcohol backfired.

A thread.
In the 1920s, the US #government decided to ban the manufacture & sale of alcohol to reduce crime rates.

But “the noble experiment,” as it came to be known, cost more than $300M to enforce, lasted for just a decade and the federal government lost $11B in tax revenue.
So what went wrong?

For starters, this prohibition proved to be bad for the #economy - thousands of jobs were lost when breweries, distilleries, and pubs shut down. Restaurants couldn’t make enough money without liquor sales either.
Read 10 tweets
11 Jul
Understanding Zomato's Unit economics and figuring out why it's the key to a profitable future. A thread🧵
Unit economics (in this instance) means measuring business performance by comparing the revenues and costs involved in processing a single order. And if you want to understand what that means, consider the example below.
Each time you place an order, you pay a certain sum to Zomato (less of all discounts). Zomato then takes a cut and they promptly transfer what’s left to restaurants. It's an oversimplification, but it will have to do for now
Read 18 tweets
9 Jul
Ever wondered what's the psychology behind free samples?

Here's all you need to know 🧵...
Milton Friedman once said that there is no such thing as a free lunch. But if you think about the freebies that brands offer us, you might feel otherwise.
We’re talking about free samples, trial packs, & testing kits. Do companies really want you to test their product and make an informed decision, or is there something more at play here?
Read 12 tweets

Did Thread Reader help you today?

Support us! We are indie developers!

This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Too expensive? Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal Become our Patreon

Thank you for your support!

Follow Us on Twitter!