The Diner's Club Card was the next step in credit cards...
It all began in 1949 when a man named Frank McNamara had a business dinner in New York's famous Major's Cabin Grill. As soon as the bill arrived, Frank realized that he did not have any cash in his wallet. He ended up paying the bill, but he decided that there should be an alternative to cash. Frank and his partner, Ralph Schneider, returned to Major's Cabin Grill in February of 1950 and paid the bill with a small, cardboard card. This "card" was known as the first Diner's Club Card.
In 1950, around 200 of these cards were given out to various people such as friends and acquaintances of Frank. The progress of the cards was very difficult and there were only 14 restaurants in New York that accepted these cards. Most merchants did not want to pay the Diner's Club's fee and didn't want competition for their own store cards. Also, customers didn't want to sign up unless there were a large number of merchants that accepted the card. But, that didn't stop the card from growing.
By 1951, there were 20,000 Diner's Club cardholders. In only its second year, the Diner's Club made a profit of $60,000. McNamara had started a company that would reshape the way customers make purchases. At the time, he didn’t seem to think it was anything special or lasting, so he decided to sell his shares in the company to his two partners for $200,000. Not even a decade later after McNamara sold his shares, the card had now been replaced with a plastic card. At this time, Diner's Club Card purchases were made on credit, but it was technically a charge card, meaning the bill had to be paid in full at the end of each month. In order to make a profit without charging interest, the companies who accepted the Diner's Club credit card were charged 7 percent for each transaction, while the subscribers to the credit card were charged a $3 annual fee. With no competition until 1958, the Diner's Club Card continued to grow more and more popular. The idea of a universal credit card that would change the world had now begun to spread across the world.
It all began in 1949 when a man named Frank McNamara had a business dinner in New York's famous Major's Cabin Grill. As soon as the bill arrived, Frank realized that he did not have any cash in his wallet. He ended up paying the bill, but he decided that there should be an alternative to cash. Frank and his partner, Ralph Schneider, returned to Major's Cabin Grill in February of 1950 and paid the bill with a small, cardboard card. This "card" was known as the first Diner's Club Card.In 1950, around 200 of these cards were given out to various people such as friends and acquaintances of Frank. The progress of the cards was very difficult and there were only 14 restaurants in New York that accepted these cards. Most merchants did not want to pay the Diner's Club's fee and didn't want competition for their own store cards. Also, customers didn't want to sign up unless there were a large number of merchants that accepted the card. But, that didn't stop the card from growing.
By 1951, there were 20,000 Diner's Club cardholders. In only its second year, the Diner's Club made a profit of $60,000. McNamara had started a company that would reshape the way customers make purchases. At the time, he didn’t seem to think it was anything special or lasting, so he decided to sell his shares in the company to his two partners for $200,000. Not even a decade later after McNamara sold his shares, the card had now been replaced with a plastic card. At this time, Diner's Club Card purchases were made on credit, but it was technically a charge card, meaning the bill had to be paid in full at the end of each month. In order to make a profit without charging interest, the companies who accepted the Diner's Club credit card were charged 7 percent for each transaction, while the subscribers to the credit card were charged a $3 annual fee. With no competition until 1958, the Diner's Club Card continued to grow more and more popular. The idea of a universal credit card that would change the world had now begun to spread across the world.
5 comments:
Very interesting, Roman! But there are no links and no sources listed, which weakens the overall presentation.
Very interesting story about the credit card. Never knew it started out as a cardboard card. I like the statistics you gave with the amount of people who were interested in getting this card. But, as you know people, even today, still don't know how to use a credit card ending in a terrible crisis. Good Job Roman.
This is a very interesting topic. It is amazing that the credit card had grown so fast in just one year. Like Zack stated I beleive that the joke is on them because all credit cards do is drain your money. Sure it is more convenient to carry around a single card but if you are not sure on the terms of the credit card you can lose a substantial amount of money over time. It is also easy to see why people would be so interested just because it is something new and just like people today everyone always wants newer, better, and more convenient things to improve their lives.
Interesting topic Roman! Thats wild about the credit card growing in just a year. Never had an idea that it started as a cardboard card and to see what it has become is amazing.
Great jod Roman! It is a very interesting topic. It helps me understand how credit card came to the society.
Post a Comment