The Creator of Credit Cards

1. Frank X. McNamara.
Courtesy of Diners Club.

By the late 1940s charge cards, such as the “charga-plate” and “courtesy card”, were well established in department stores and oil companies. However, restaurants did not have any card system in place, only credit accounts for regular customers.[1] That was until Frank McNamara came up with the idea of the Diner’s Club.

“The First Supper”

“The First Supper” as it became known, is the story of how Frank McNamara came up with the idea of the Diner’s Club. In 1949 Frank McNamara was having dinner with a business associate in a Manhattan restaurant and when the bill came he realized he had no cash to pay. By the time his wife arrived with the money the bill was already settled.[2]The shortness of cash led McNamara to the idea of using charge cards in restaurants. As interesting as the story may have been it was a hoax elaborated by Bloomingdale to make the story more appealing.[3]

Alfred Bloomingdale

2. Alfred Bloomingdale

As the real story goes, McNamara was actually a well-known executive of the Hamilton Credit Corporation.[4] His finance company was struggling with uncollected debt and he needed a way to make more money. McNamara proposed an idea to bring charge cards to the restaurant business to two of his friends Alfred Bloomingdale and Ralph Schneider. McNamara not only proposed bringing charge cards to restaurants, but also added an interest to the monthly payments.[5]That way he was able to make a profit from every card that was given out.

Frank McNamara convinced many restaurants in lower Manhattan to sign up for the card at a ten percent discount for every store purchase. Many salesmen then signed up because there was no fee or charge and it made it easier to purchase meals without worrying about cash. Thus in 1950 the Diner’s Club was born along with a brand new industry of the credit card.

Charge It, Please!

On their one-year anniversary, Time Magazine did an article on the Diner’s Club and its success. The club by then had 42,000 members and offered the card at 330 U.S. establishments.[6] Club members could charge for food, drink, rented cars and hotel rooms and have it all billed at the end of the month.[7]Members paid three dollars a year for the card’s services along with a seven percent interest rate for every charge.

Frank McNamara’s idea caught on fast and by 1955 the Diner’s Club was followed by Trip Charge, Golden Key, Gourmet Club, Esquire Club, and Carte Blanche.[8]Though the credit card seemed like a growing business, Frank McNamara believed it was just a fad. In 1953 he sold out to Schneider and Bloomingdale for $200,000 and went into real estate. By 1957 Frank McNamara was broke and suffered from a heart attack and died.[9]Though McNamara was unable to enjoy the success of his invention he gave the world a new way of doing business.

“A New Industry”

The Diner’s Club Card sparked what we now think of as the modern-day credit card. Customers were able to make purchases at different locations and businesses and were no longer limited to what they could purchase. Although it was not until 1958 when Bank of America came out with its BankAmericard that we saw an all purpose credit card; the true credit for the invention of the credit card rests with Frank McNamara and the Diner’s Club. Today it seems as if everyone carries a credit card and as Alfred Bloomingdale predicted in 1960, “there will be only two classes of people—those with credit cards and those who can’t get them.”[10]

[1] Lewis Mandell, The Credit Card Industry: A History, (Boston, MA: Twayne Publishers), 1990, 3.

[2] Lord,L., “He Led the ‘Charge It’ Charge. (Cover Story).” U.S. News & World Report 127, no. 25 (December 27, 1999): 62. (accessed Feburary 25, 2013).

[3] Ibid.

[4] Mandell, 1.

[5] Mandell, 3.

[6] “Charge It, Please.” Time 57, no. 15 (April 9, 1951): 102. aspx?direct=true&db=a9h&AN=60444182&site=ehost-live (accessed Feburary 24, 2013)

[7] Ibid.

[8] Nancy Shepherdson, “Credit Card America.” American Heritage 42, no. 7 (November 1991): 127. (accessed Feburary 24, 2013).

[9] Lord, 62.

[10] Shepherdson, 132.


1. Frank McNamara., Accessed April 12, 2013.

2. Alfred Bloomingdale. 1980. USA. By WWD Archive. ople/clothes-minded-the-style-of-betsy-bloomingdale-2344684, Accessed April 12, 2013.